There are various types of landlords’ insurance policies available, with hundreds of offers giving you different levels of protection against your tenants. Although cheap landlords’ insurance offers can be appealing, you have to consider whether they are cheap for a reason: are you getting the most for your money? This guide offers you some information on what to look out for when approaching deals for cheap landlords insurance, as well as explaining what certain terms mean.

Guaranteed Rental Income

A guaranteed rent policy is designed to offer protection to landlords when they encounter a tenant who refuses to or is unable to pay their owed rent. Many policies also cover circumstances such as fire or flood damage which renders the property uninhabitable to tenants, thus removing any payment that you should receive.

The catch that many policies have is that they only cover failed payment of a tenant up to a specified length of time or up until a certain sum of money has been paid out. As with other types of insurance, you should note any excess cost to your policy – some companies will only pay out after you have, for example, paid the first £500 of the rent.

A rent guarantee scheme is often useful if you are reliant on your rental income as a source of income, or if you believe that you have high risk tenants. You will need to weigh up the potential benefit against the increased cost in insurance.

Legal Costs

An expense that some landlords fail to recognise is the cost of legal fees if you are subject to a legal complaint from one of your tenants. All landlords have legally binding requirements placed upon them, which could become very costly if left to escalate; seeking legal advice is often the very best option to resolve an issue.

Most cheap landlord insurance policies don’t offer legal aid but everything from a small electrical failure to vandalism can require a specialist to give you appropriate advice. Depending on the type of problem, you can find yourself facing some very expensive legal fees just for the consultation – you may find that having your insurance company cover the cost is a worthwhile investment when compared to the potentially huge legal fees that you may encounter.

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