Landlord insurance in Cyprus in 2023. A complete guide.
Landlord insurance
If you have properties you rent out long-term, such as a holiday home or second home, you need more than a homeowner's policy.
If your property is damaged in an earthquake and you can’t rent it out, landlord insurance can compensate you for loss of earnings, whereas standard home insurance can’t.
Landlord insurance includes other landlord-specific coverage, such as tenant default insurance. It protects your rental property in ways that homeowners' insurance cannot.
This guide will cover property insurance for landlords in Cyprus, when you need it, what it covers, and how much it costs.
Table of contents
- What is landlord insurance?
- What does landlord insurance cover?
- Landlord liability insurance
- Do I need landlord insurance in Cyprus?
- Homeowners' insurance vs landlord insurance
- Who pays building insurance, landlord or tenant?
- Can I have landlord insurance for multiple properties?
- Landlord insurance comparison
- Best landlord insurance Cyprus
- How much is landlord insurance?
- What is the rebuild cost for insurance purposes?
What is landlord insurance?
Landlord insurance provides dwelling and liability coverage that protects against damages and injuries sustained on your property.
It covers the property and your personal property, much like standard homeowners' insurance. Still, in the event of damage which renders a rental property unusable, you need extra cover.
The main difference compared to homeowner insurance is that landlord insurance covers the loss of rental income.
What does landlord insurance cover?
Landlord insurance covers the rented home, unattached property structures, and your personal property (but not the tenant’s property).
It also includes liability insurance and loss of rental income if your rental property becomes inhabitable due to covered damage.
Landlord property insurance policies typically include the following.
Dwelling coverage
This portion of the landlord insurance covers physical damage or losses to the property caused by insured issues such as fire and extreme weather. It can help pay for repair work.
Other structures coverage
This part of the policy protects detached structures not connected to the property, such as fences, sheds, and garages. If a covered loss damages them, other structures' coverage can pay for repairs or replacements.
Personal property coverage
This coverage protects the belongings you leave on-site to maintain the rental property, such as a lawnmower. Landlord insurance may pay for this equipment if it’s damaged. However, items not used for property maintenance likely won’t be covered.
Exclusions
Landlord insurance policies don’t cover the renter’s personal belongings. For example, if a tenant’s furnishings and possessions get destroyed in a fire, they will need renters’ insurance to cover their losses. You should inform your tenant so they know to insure their belongings.
Landlord insurance typically doesn’t cover repairs to household appliances either. The tenant is usually responsible for certain maintenance costs.
Like homeowners' insurance exclusions, landlord policies also have limits, such as:
- Neglect and mold infestation
- Sewer backup and water damage
- Government action and war
- Earth movements, such as earthquakes and mudslides
All landlord insurance coverage is subject to deductibles and limits as stated in your policy. Your deductible is the amount you’ll contribute toward a covered loss before your landlord insurance takes effect.
Each insurance (the coverages above) typically has separate deductibles and limits. The limit is the maximum amount your policy will pay after a covered loss.
Depending on your insurance, you may be able to set deductibles and limit amounts for each coverage option.
Landlord liability insurance
All standard landlord insurance includes liability coverage. The liability portion of your landlord insurance can protect you from injury or damage claims from third parties on your rental property. It can help cover medical bills or legal expenses.
For example, suppose your tenant trips on broken flooring or your gardener gets hurt while working. If the court determines that you neglected to maintain your property which caused the accident, you could be held responsible for medical and legal costs.
In that case, landlord public liability insurance may help pay for any fees up to your policy’s limits. You typically won’t pay a deductible for a liability claim.
Do I need landlord insurance?
No - you are not required to have landlord insurance by law. However, most lenders will encourage you to get it if you have a mortgage or are financing the property.
It’s essential to understand what your home policy covers, as it may not be enough to cover you.
Any damage to the property you rent out, your belongings, and legal expenses may be on you unless you get landlord insurance.
Homeowners' insurance vs landlord insurance
Homeowner and landlord insurance share a few similarities, but your needs will determine which will work best for you.
The type of insurance you need as a landlord depends on the rental property. We will compare the differences here.
Homeowner insurance for rental property
This type of insurance might be suitable if you occasionally rent out your home short-term. However, you might not be fully protected by a standard home policy.
Most homeowner insurance protects you if you periodically rent out your main residence. If you do - you should notify your insurance providers, who may need to add a rider to your policy.
You may need extra protection as standard homeowners' insurance provides limited coverage for rental properties.
Landlord insurance for rental property
This type of insurance is best suited to long-term rentals. Landlord insurance will cover you for periods like six months or more.
You may also require landlord insurance for short-term rentals, as most home insurance typically doesn’t cover short-term or long-term lets.
If you frequently rent out your home, you should ask your insurance provider about short-term rental insurance or landlord insurance.
Summary
- Home insurance helps cover your home’s repair or rebuild costs when it’s damaged by an insured event, like fire, flood, or burglary.
- Most homeowner policies provide limited coverage for rental properties, which is why additional cover and landlord insurance are usually necessary.
- Landlord Insurance covers everything typically found in homeowners' insurance, but it also includes specific cover suited to landlords.
- Loss of rent insurance protects your property if it becomes inhabitable and needs repairs, while additional coverage can pay for other damage caused by tenants.
Who pays building insurance, landlord or tenant?
As the property owner, you are responsible for arranging landlord building insurance. In general, landlords usually cover building insurance for commercially rented properties.
However, a landlord can pass the cost of building insurance to the tenant under some commercial lease agreements.
As the property owner, you have an insurable interest in the building. In other words, you will suffer a loss if you are not adequately insured. You can also benefit from a successful claim, so it works to your advantage to get adequate coverage.
By arranging the insurance, you will have peace of mind that the policy is in force, and you can deal directly with your insurance provider if you face a claim.
Can I have landlord insurance for multiple properties?
Yes - most landlord insurance providers allow landlords to insure multiple properties under a single multi-property insurance policy.
Not only can this save you time, but it’s often cheaper than taking out separate policies for each property. Having one policy means only one payment and one renewal per year.
If you have an existing landlord policy and are increasing your portfolio of rentals, you can usually take out multiple-property landlord insurance.
Sometimes referred to as portfolio insurance, this insurance usually covers landlords with over three rental properties.
Landlord insurance comparison
When comparing landlord insurance, you will come across all-risk or named perils contracts. It’s important to know the differences between each.
All-risk contracts have few limitations and cover all risks and perils (that the policy doesn’t specifically exclude). They are also known as open perils contracts or policies.
In comparison, named perils contracts explicitly list the covered risks and perils. These policies only cover the listed events in the agreement; therefore, many perils may be excluded.
For example, a named perils policy that covers fire damage won’t pay for flood damage. In contrast, an all-risk contract may include both perils in one policy under the same coverage.
When you receive landlord insurance quotes, your needs will be assessed by underwriters who will determine the risks of insuring your rental property.
Only international underwriters provide all-risk contracts, and Cyprus works with local and international underwriters.
At Pitsas Insurances, we cooperate with local and international underwriters to provide you with the best landlord insurance.
Best landlord insurance Cyprus
Pitsas Insurances can help you find the best landlord insurance in Cyprus.
We will help you find the cheapest landlord insurance if you are searching for an affordable choice.
How much is landlord insurance?
The cost of landlord insurance is dependent on the coverage you need.
To summarize, the following factors affect the cost of insurance for landlords.
- Monthly rental income cost
- Your previous and current claims history
- The total rebuild cost of the rental property
- The value of insured belongings and contents
- The total built-up area of the property
- Property construction materials (e.g., brickwork)
- Year of construction (or the age of the building)
- If the property is left unoccupied and for how long
- Type of property (e.g., maisonette or block of flats)
- Number of levels and types of rooms (e.g., cellar or basement)
Factors that reduce the premium of landlord insurance
Several methods can help you reduce the cost of your insurance. For affordable landlord insurance, consider making the following changes.
Security installation. Extra security measures such as high-quality locks, safes for valuables, and smoke and burglar alarms in your rental property will help reduce your premiums.
Property maintenance. Ensuring your property is in good repair and condition will reduce the risk of claims and can lower your insurance costs.
Deductibles and excess. Also known as a deductible, the excess is the amount you contribute to a claim. By raising your excess, you will lower your premiums. Ensure this is an affordable amount.
Annual payments. You can usually reduce your insurance costs by paying annually in one go, as installments are more expensive.
Combining policies. You can usually get deals by combining policies with the same insurer. Buying certain coverages together under the same policy can save you money.
No-claims discount. Generally, the longer you go without making a claim, the more money you save.
What is the rebuild cost for insurance purposes?
You need to calculate the rebuild cost of your property to get a landlord insurance quote, but what is the rebuild cost?
If your rental property was damaged or destroyed beyond repair, the rebuild cost is the amount of money you would need to rebuild it.
The total rebuild cost can be broken down into two main factors.
- Costs of labor
- Costs of materials
There are also two ways to calculate the rebuild cost of your property.
- Costly option. You can hire a chartered surveyor to conduct an accurate assessment.
- Cheap option. You can use your area’s average construction cost per sq.m. in a calculation to estimate the cost.
To calculate the total rebuild cost of your property, if you opt for the cheap option above, you need to find out the average construction cost per sq.m. in your area.
Once you know what that is, you can multiply the total area of your house by the average construction cost. That number is the reconstruction value of your home (excluding the value content).
Note: The total rebuild cost is lower than market value, as it doesn’t account for the cost of the land on which your home is built.
Quote for landlord insurance
Without adequate landlord insurance, you could face financial difficulties alone in the event of theft or damage.
Pitsas Insurances can help shoulder financial burdens with customizable landlord insurance packages to protect your investment.
For more information about landlord insurance, please visit our website.
To get a personalized quote for landlord insurance in Cyprus, complete our questionnaire.
Pitsas Insurances is part of a renowned group of companies, Amazon Group Services.
We work with many civil engineers who can help you accurately calculate the rebuild value of your rental properties.