Buy-to-let property insurance, which is sometimes called "residential property owners insurance," is needed if you rent out houses or flats for a short or long time. If you rent five or less properties in the UK, you can usually get cheaper buy-to-let property insurance than if you rent more than five properties. This is because a landlord with five or less properties is seen as a small business, while a landlord with more than five properties is seen as a full-fledged property-owning company.
Whether you plan to rent five or less properties or five or more properties is irrelevant, though, because you'll need at least the minimum level of insurance to protect yourself in either case. So, the number of properties you own will only affect the amount you pay for insurance premiums. So, if you want to become a property owner with a rental business, you need to make sure that your insurance policy has at least the following:
Fire
Making sure the property is covered in case of a fire
Natural Disaster (also known as tempest insurance)
Getting insurance against natural disasters like a storm that blows off your roof or gutters
Theft
Which is especially important if you rent out places that are already fully furnished. If you rent out a place that isn't furnished, you might want to talk to your tenants about whether or not they need home contents insurance.
Insurance for the public
This should be a must because it will protect you from any claims your tenants or third parties (like their guests) may have for injuries they get on your property.
Loss of Money
There may be times when your rental property is empty, like when you are looking for new tenants. If you need the rent from your tenants to pay back the money you borrowed to buy the property, you should make sure you have lost earnings insurance to cover you during this time.
Liability insurance for employees
If you have employees who will go to the property to fix problems or collect rent, you need to make sure you have employee liability insurance in case they get hurt while doing their job.
Legal Expenses Insurance
As a landlord, you may need to hire a lawyer from time to time. For example, if your tenants don't pay their rent or leave the property at the agreed-upon time, you may need to get an eviction notice. Since legal fees in the UK can be expensive, you might want to protect yourself by putting a clause in your insurance policy that covers legal fees.
Even though the above are the bare minimums you need in your buy-to-let property insurance policy, you can also customise it to meet your specific needs. Make sure you talk to your insurance provider about your situation, especially if you plan to grow your business in the near future.
