Home Insurance for Landlords
Renting out a residential property can be lucrative, but it also comes with a range of financial and legal risks. Standard building and contents home insurance policies won’t be sufficient to cover these and are typically invalidated when a property is being let out on a long-term basis.
If you’re one of the two million Britons renting out a residential property, you’ll want to get a specialised home insurance policy for it called landlord insurance or buy to let insurance. These policies provide protection against the damage, theft or loss of the structure and contents of the property, as well as against other liabilities faced by landlords.
In this guide:
- What does landlord insurance cover?
- What additional cover can you get?
- Who is landlords insurance for?
- How do you compare landlord insurance?
There are two types of landlord insurance cover, which are often sold together.
- Buildings Cover: provides you with compensation for the repair of the building and permanent fixtures of the home (such as bathroom and kitchen fittings) if they are damaged or lost in a fire, flood, storm, other natural disaster, collision or as a consequence of a leak or crime, or another insured event.
- Contents Cover: gives you compensation for the repair or replacement of furnishings and appliances you have provided with the rental property. Even if you’re renting out the property unfurnished, you’ll want contents cover for the appliances you are legally required to provide - these won’t be covered by a buildings insurance policy. Note that landlord content insurance policies don’t apply to the possessions that your tenants store in the property. They’ll need to take out their own insurance policy, sometimes called tenants insurance.
You can also obtain additional cover to protect you against the specific risks, liabilities, and legal obligations of being a landlord. These include:
- Damage or Theft by Tenants: covers you if your tenants steal the property’s contents or damage it furnishings, structure or fixtures, whether accidentally or deliberately. By contrast, standard contents insurance policies generally don’t cover theft unless there’s sign of forced entry and won’t cover deliberate destruction.
- Home Emergency Cover: if your rented property’s electricity, heating or plumbing fail, or if damage to windows and doors compromise its security, as a landlord you are legally required to repair them as soon as possible. Home emergency cover can reimburse you for the cost of emergency repairs.
- Landlord Liability: if a tenant or one of their visitors suffers harm as a result of a fault in your property, you can be held legally and financially liable. This provision covers you against claims for compensation and legal expenses. Look for a policy with at least £1 million of liability cover.
- Alternative Accommodation Cover: you can be required to provide other lodgings for your tenants if the property is rendered uninhabitable due to an insured event, this provision will cover that.
- Rental Protection Insurance/Loss of Rent: compensates you for lost rent if the property is rendered uninhabitable due to an insured event.
- Tenant Default/Rent Guarantee Insurance: reimburses you if your tenants don’t pay rent. You’re generally entitled to payments equal to the rent you were charging—although typically capped at £2,500 a month. You qualify for these payouts after your tenants have failed to pay rent for two consecutive months.
- Legal Expenses: covers your expenses if you need to pursue legal help or action in disputes with tenants, including eviction proceedings, removal of squatters and the pursuit of lost rent.
- Unoccupied Property Insurance: most home insurance policies are invalidated after a property has been vacant for 30 or 60 consecutive days. Rental properties may be empty for this long between tenants and you’ll need unoccupied property insurance to secure them. To keep this cover valid, you may need to undertake regular check on the property.
Landlords insurance is for owners who rent out residential properties for long periods of time. Landlords of commercial buildings will need to obtain a different type of insurance. Additionally, these policies aren’t suitable for people who rent out properties on a short-term basis, such as through Airbnb.
Landlords insurance isn’t legal requirement, but it’s a wise financial precaution. Additionally, some lenders will require you take out landlords insurance as a condition of your buy to let mortgage.
Standard home insurance won’t be sufficient for rental properties, failing to protect you against eventualities like deliberate damage by tenants and theft of contents by them. It also won’t give you the legal and financial protections you may need as a landlord, including liability insurance and rental guarantee. A standard home insurance policy will be invalidated if you rent out the property.
If you have multiple residential rental properties, you may be able to secure a single landlord insurance policy for all of them, saving you hassle and money.
The best way to find cheap home insurance for landlords and a policy that provides all the cover you need is to shop around. Money Expert is a price comparison site and can help you fetch dozens of quotes from insurers in minutes, enabling you to identify the policies with the best prices and most suitable terms.
To get quotes for landlord insurance, you’ll need to supply the following information:
- the property’s address
- the date the property was built
- how long you have owned the property
- the type of property (flat or house). If it’s a flat, you’ll also need details about the building it’s in and its use (residential or commercial)
- details the location of the property, including whether it’s in a flood plain or near large trees or has experienced subsidence
- information about the security of the property, including its lock and alarms
- whether the property is fitted with smoke and carbon monoxide detectors (These precautions are typically required as a condition of insurance. Not having them, or not having working ones, could invalidate any claims you make on your policy. So, make sure you’re testing them and replacing batteries.)
- details about the tenants living in the property, including their occupations and the length of the tenancy agreement. Insurers see thorough tenant referencing as a risk management strategy and may reward you with lower premiums
- details about yourself and any claims you’ve made on other insurance policies in the last five years