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Buy-to-let insurance explained

Image of a model house sitting on some coins with the words “Buy to let” in front
06 Feb

Landlords must possess a specific type of insurance policy to keep their tenants and themselves protected. This is known as buy-to-let insurance. Learn the basics about buy-to-let insurance here, and speak with a Moneysprite adviser for support in finding appropriate rental property insurance.

What is buy-to-let insurance?

Buy-to-let insurance, also known as BTL insurance, is a type of insurance policy for rental properties. Landlords will need to take out buy-to-let insurance when renting a property to tenants because regular residential insurance will not adequately protect them and their property.

Although it’s not a legal requirement to have landlord insurance, many BTL mortgages make it compulsory. So you might have to take it out anyway.

What does buy-to-let insurance cover?

The significant difference between buy-to-let insurance and ordinary residential insurance is that BTL insurance protects the landlord if a tenant is injured or even killed due to a fault with the property.

For example, if an electrical fault caused harm to the tenant, they could be owed compensation. However, BTL insurance covers the landlord in these cases to prevent him or her from having to make a substantial payout.

Moreover, buy-to-let insurance usually provides building cover from (accidental) damage, such as fires, flooding and other natural disasters. Depending on the policy, it might include content’s cover too.

When contents cover is included, it typically covers the landlord’s possessions only, such as white goods. Tenants will be required to take out their own content insurance for their possessions if desired.

Which buy-to-let policy is best for me?

You can find BTL insurance policies that cover an individual property. And you can get BTL insurance policies to cover multiple properties, which can be beneficial to landlords with a rental portfolio. There are even BTL insurance policies for commercial businesses and developers that need to insure a block of flats.

You might also want to adapt your BTL insurance with optional extras. Some of the most popular extras include:

  1. Alternative accommodation protection – when a rental property cannot be lived in – e.g., due to flooding – you will have to relocate your tenants to safe accommodation. This extra will pay the cost of having to provide alternative accommodation.
  2. Missed rent payments – the insurance provider will pay you the rent owed when tenants don’t pay. This can be a valuable safeguard if you rely on the rental income to pay the BTL mortgage.
  3. Theft and damage – this extra will cover the cost of repairing the property or replacing items when a tenant has purposefully damaged the property or stolen from you.
Get the cover you need with Moneysprite 

We’ve already helped scores of landlords to find and secure the BTL insurance policies they require. Whether you have one or one-hundred rental properties, Moneysprite is on hand to help you select and apply for the right BTL insurance policy. Get in touch, today!

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