Crucial new insurance for landlords

The leading association for landlords has launched new insurance to protect landlords' possessions in their rental properties. We look under the roof to see what it looks like.

The National Landlords Association has just added to its product range with its own version of landlords contents insurance. I have written previously about another of its products, its rent guarantee insurance, in Landlords: lower your costs. Its new product is a type of insurance that protects your belongings in your properties, such as carpets, furnishings and household goods, or other contents specifically provided for the tenant.

The NLA's landlords contents insurance is provided by insurer Allianz, through the intermediary Hamilton Fraser Insurance. The association offers two levels of cover: standard and superior.

What is covered

Fire, water, theft and broken fixed glass is covered, although theft by a tenant or their guests is not covered in the standard policy.

The superior policy also covers malicious damage up to £5,000 by your tenant. However, significantly, accidental damage by your tenant is not covered by either policy (even though it doesn't specifically say that in the policy summary for the standard version). You can get cover for up to 30 days when the property is unoccupied, or 90 days in the superior version.

What you don't get

Jewellery, cameras, sports equipment, pets, vehicles and the tenant's property aren't covered, nor are high value curios or works of art. In a set or suite, undamaged parts or areas aren't covered.

Another significant exclusion is that damage caused by wear and tear, rusting, corrosion, rising damp, and failure of boiler parts aren't covered, nor is any normal maintenance or faulty workmanship. Damage caused by pests is also excluded.

How does it compare?

I compared these NLA policies with that of another landlords insurance provider, RSA. In all significant terms, RSA's policy looks in my inspection to be very similar to the NLA's standard policy.

NLA's superior policy has the additional benefits over the RSA's policy in terms of theft and malicious damage by the resident, and longer unoccupancy period. However, you should make your own comparisons in case I have missed something, and other insurers may have more unusual benefits or exclusions.

The cost

Pricing of landlords insurance is individual, like almost all insurances, and can range from £80 to hundreds of pounds. The NLA, doesn't publicise its cheapest or average premium figures, and nor do any other landlords contents insurers, but it does offer a 15% discount for landlords who are members of the NLA.

My view

The NLA's policies aren't just about contents. You can choose to add on buildings insurance, liability insurance and many more. Indeed, it is hard to find insurers that offer a landlord's insurance quote for just contents alone, without buildings insurance and possibly other extras as well, making it difficult to truly individualise your cover.

Since it is so difficult to buy separately, you will probably find there is more competition and therefore lower prices overall if you buy several of your landlords insurances together, although that doesn't help if you want to pick and choose based on what you think your main risks are.

Contents insurance for homeowners is not fantastically cheap, because it is full of exclusions, the insurers have a reputation for fighting claims, and insurers pay out just 50p to 55p for every £1 they receive in premiums. Landlords contents policies seem to be equally full of small print, and they seem to be hard to compare, unlike home insurance. For these two reasons, I would expect the pay out to be the same or less for landlords contents insurance than homeowner contents insurance.

Landlords should consider the cost of the premiums over, say, 10 to 15 years, against the possibility of significant claims every few years. If you cannot afford not to have the insurance, or if you believe your risks are quite high, the insurance might be worth it for you. If not, and if you have a large savings pot, you might want to self-insure your contents, because most landlords could expect to save money in the long run.

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