Landlord Insurance

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Introduction to Landlord Insurance

We get lots of requests for advice on landlord insurance from customers who want to ensure their property is adequately protected while they rent it out.

Landlord insurance is growing in popularity in the UK with a wide range of products to choose from and some great deals to be had, so even if you’ve taken out similar policies before, you might find yourself wondering where to start.

If you’re in the market for landlord insurance and spoiled for choice it can be immensely helpful to speak to an insurance expert with specialist knowledge of the investment property landscape, as they can point you towards the best deals that meet your needs and requirements, as well as offering some innovative features you may not even have considered.

The advisors we work with are ideally placed to help, as they have access to the entire market, as well as a comprehensive knowledge of the available products and how they can benefit landlords in all kinds of situations, whether you’re letting a room for a few months while you go travelling, or you’re a portfolio landlord with a full-scale property empire.

To arrange a no-obligation consultation with a landlord insurance specialist, give us a call on 0800 304 7880 or make an enquiry here and we’ll be in touch to discuss your requirements.

Let’s take a look at the nuts and bolts of landlord insurance and why you might want to take it out – click on each topic to read more:

What is landlord insurance?

Landlord insurance is a category of home insurance that is specially designed for properties that are rented out, recognising the additional risks that come with letting to tenants. It is intended to allow for types of eventualities that are more likely to happen to rentals than owner-occupied properties.

What does landlord insurance cover?

The most basic types of landlord insurance cover much the same issues as ordinary home insurance policies do (i.e. damage to the building, as well as its contents in some cases) but due to the additional wear and tear that rental properties are susceptible to, they tend to have higher premiums.

More sophisticated landlord insurance policies can come with extras, such as rental protection cover, liability insurance, legal costs in the event of tenant disputes and a whole range of other features designed to cover eventualities that are unique to landlords (see ‘types of landlord insurance’ for examples).

Is landlord insurance compulsory?

The most basic types of landlord insurance cover much the same issues as ordinary home insurance policies do (i.e. damage to the building, as well as its contents in some cases) but due to the additional wear and tear that rental properties are susceptible to, they tend to have higher premiums.

More sophisticated landlord insurance policies can come with extras, such as rental protection cover, liability insurance, legal costs in the event of tenant disputes and a whole range of other features designed to cover eventualities that are unique to landlords (see ‘types of landlord insurance’ for examples).

Isn’t standard home insurance good enough?

Some landlords are put off by the higher cost of landlord insurance and ask us if it’s really necessary when they already have a decent home insurance policy. It’s important to remember that when you rent out a property for any length of time, you are taking on additional risks that are not within the scope of an ordinary home insurance policy.  In fact, it is likely that you will invalidate a normal home insurance policy if you let out the property.

If you’re worried about being charged a hefty premium to insure your rented property, the experts we work with can help you to find an affordable solution that will still protect your investment property from damage that could ultimately affect its value and leave you out of pocket when you have to pay for repairs. Call us on 0800 304 7880 to arrange a consultation.

Types of landlord insurance

Landlord insurance typically falls into one or more of the following categories, and you may be able to mix and match several features in a single product.

Landlord’s buildings insurance

Landlord buildings insurance covers your investment property for damage to the fabric of the building, such as fire and smoke damage, water damage, leaking roofs and other problems that can be expensive to fix. Most buildings insurance policies also cover fixed bathroom fittings such as toilets and basins.

On top of the risks that are covered by most buildings policies, landlord’s buildings insurance often covers additional types of damage, such as vandalism.

Many Buy to Let mortgages now require you to have taken out landlord building insurance, and your existing insurance will usually be invalid once tenants move in.

Landlord’s contents insurance

This can be sold in a bundle with landlord buildings insurance, or as an add-on. You’ll probably only need it if your rental property is furnished with your own belongings, as it usually covers everything from carpets and curtains to white goods, right down to kitchen utensils and china

Contents policies can generally be flexed to insure these items to different levels of cover, including theft, fire, smoke and other damage to all or a specific part of the property (including communal areas in some flats), and you might want to consider adding an accidental damage policy that includes breakages and spillages.

Tenants will still be responsible for insuring their own items.

Rental protection insurance

This is a more ‘premium’ add-on to your landlord insurance, which pays out during the period following any damage to the property that is serious enough to make it uninhabitable. If you’re relying on taking a certain amount of rental income each month, this type of insurance can be very valuable in the event of a lengthy refurb following a fire, for example.

Also called ‘rent guarantee insurance’, some policies will also cover landlords for gaps in rental income for all sorts of reasons, including tenant defaults: this usually means you can claim for the loss of income if a tenant fails to pay for one month of more.

Public liability insurance

If a tenant sustains an injury while resident in your property, the law says they are entitled to make a claim against you, which could be very costly. This type of insurance covers you for this eventuality, and is similar to the Public Liability insurance taken out by public venues, but is designed for private properties.

This is intended to cover a more general range of legal costs that could arise from a dispute with your tenant(s). It may cover legal costs for evictions, recovery of rent arrears, resolving thefts or damage to your property and alternative accommodation costs if you lose access to the property. Check your policy to be sure of which risks are covered.

Portfolio insurance

For those with two or more investment properties, many insurers allow purchase of a single policy to cover a number of properties, which usually works out cheaper than insuring each individually.

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How much does landlord insurance cost?

Customers often ask, ‘is landlord insurance expensive?’ In general, it is costlier than standard home insurance, due to the additional risks involved. But the exact price is influenced by various factors including:

  • Location: Just like standard home insurance, some locations pose greater risk, e.g. areas vulnerable to subsidence, high crime areas and those at greater risk of flooding or other environmental damage.
  • Size of property: as with all types of home insurance, the bigger the property, the more there is to insure, and the higher the premium.
  • Tenants: If you ever lived in shared student accommodation, it may come as no surprise to you that some insurers will charge a higher premium if you rent your property to students.  
  • The type of landlord insurance and level of cover you choose to take out, as well as the voluntary excess you set.

What type of landlord insurance is right for me?

As you can see from the various flavours of insurance that are available, there are solutions to suit almost every landlord. A few less obvious issues to bear in mind when choosing which type of landlord insurance to purchase are as follows:

  • Are you renting a furnished or unfurnished property? If it’s furnished, you may well want to consider taking out a contents policy alongside buildings cover, and even if it isn’t, are there any expensive white goods, cherished lighting fixtures or garden items that you would struggle financially to replace?  
  • Do you have a portfolio of properties? If so, portfolio insurance is likely to be a more cost-effective solution than taking out individual policies.
  • Do you depend on rental income? If you have financial commitments that depend on this income stream, you may want to consider a rent protection policy.

These are just a few of the considerations that might help you choose the most suitable landlord insurance package, but the best approach is to speak to an insurance expert with an up-to-date insight into what’s available and how to get the most affordable deal.

Do I need to take out landlord insurance for AirBNB or a short-term let?

If you’re only planning to rent out your space for a few weeks, you’re unlikely to be open to the idea of a 12-month policy with a premium that will undoubtedly dwarf the takings you’ll get from temporary guests.

Thanks to the rise of AirBNB and similar initiatives, there are now plenty of insurance products  geared towards the needs of occasional and short-term landlords, including policies that only cover a single room. There are policies available covering for theft, damage, legal assistance and even injury to guests in some cases.

Do I need landlord insurance for a lodger?

Lodgers present a similar insurance challenge as AirBNB’s room rentals do, in that they share some space with you while also having access to the property while you’re out. This arrangement will technically turn your home into a ‘House in Multiple Occupation’ or HMO.

HMOs aren’t covered by standard home insurance policies, so you will need to look into a product designed for lodgers. These are not generally as costly as policies covering rental agreements where the landlord is absent.

Do I need landlord insurance if I rent to family members?

You might be surprised to learn that the answer is frequently yes, and you will need to notify your mortgage provider too. However, you are less likely to need as many ‘extras’ when renting to family – such as protection against theft or damage – so this should keep the costs down…depending on how well you get on with your relatives, of course!   

Speak to an expert on landlord insurance

If you’re in the market for landlord insurance and would like to speak to an expert on the best products for your circumstances, the specialist advisors we work with will be happy to help you out.

Give us a call today on 0800 304 7880 or make an enquiry here and we’ll be in touch shortly to discuss your requirements and set up a call with no obligations on your part.

Find out more about Landlord Insurances

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Give us a call on 0800 304 7880. Or fill out the enquiry form to be matched with a suitable advisor.