The fact is if you are a landlord that owns a rental property then I would suggest you absolutely need good Landlord Insurance. Without it your property will be complete exposed to financial risks. If it burns to the ground, you will have either lost everything of need to rebuild it using your own money. There are not many landlords that can afford that sort of risk.
It is true that if you have a mortgage on the property then you are contractually required to have Landlord Insurance in place to protect the mortgage company’s loan. If you don’t put insurance in place and the lender finds out about it then you could have the loan recalled immediately.
Worse than that, if the house does burn down without insurance, the mortgage company could pursue you for reinstatement costs personally as it will need a property to sell to get its money back. Make no mistake, the mortgage company will bankrupt you if needed to get their loan back, they are a business. So get Landlord Insurance in place if you have a mortgage, it’s not worth the risk otherwise.
Some landlords thinks around £120 per year is too much to pay for Landlord Insurance and will take the risk and self insure. In these cases, if anything goes wrong, then they will have to pay for repairs out of their own pocket.
I think that is sheer madness. If the average Landlord Insurance policy costs £120 or thereabouts (all of my own seven properties cost less than this) then that is small change compared to the cost of a major claim.
Subsidence can cost £35,000 to fix. I can’t afford that risk. If it happens to my let property it will lose the tenants, I can’t afford to fix it without a new mortgage and I’ve added years of debt to my life.
What about if the fire burnt the house to the ground. If the rebuild value is £100,000, my £120 policy will pay for it all. Without it I have to pay for it all. This really isn’t rocket science and if you cannot see the clear benefits of Landlord Insurance and think it is worth avoiding to save the paltry sum, then I suggest you need to consider whether you are really a serious landlord or a gambler.
So my argument is that anyone with a property needs to insure it. The downside financially if you suffer a problem is huge without Landlord Insurance. Get it today if you need it.