What is Landlord Insurance?
Landlord insurance is a specialist type of property insurance designed specifically for buy-to-let property owners. Unlike standard home insurance, it's tailored to the unique risks that come with renting out a property to tenants.
While there's no legal requirement to have landlord insurance (unless your mortgage lender requires it), going without cover leaves you exposed to significant financial risks. A single claim for fire damage, flood, or tenant injury could cost tens of thousands of pounds.
Types of Cover Available
Landlord insurance isn't a single product—it's typically a combination of several different covers bundled together. The main components include:
- Buildings insurance - protects the physical structure
- Contents insurance - covers landlord-owned furniture and appliances
- Loss of rent - replaces income if the property becomes uninhabitable
- Property owners' liability - covers injury claims from tenants or visitors
- Legal expenses - covers costs for tenant disputes and evictions
- Rent guarantee - protects against tenant non-payment
Not all landlords need every type of cover. The right combination depends on your property type, whether you let furnished or unfurnished, and your risk tolerance.
Buildings Insurance Explained
Buildings insurance is the foundation of any landlord policy. It covers the cost of repairing or rebuilding the physical structure of your property if it's damaged by an insured event such as:
- Fire and smoke damage
- Flood and water damage
- Storm damage
- Subsidence, heave, and landslip
- Impact damage (e.g., vehicle collision)
- Theft and vandalism
The sum insured should reflect the rebuild cost of your property, not its market value. The rebuild cost is typically lower than the sale price because it doesn't include the land value. You can get a rebuild cost estimate from the Building Cost Information Service (BCIS) or through a professional surveyor.
Contents Insurance for Landlords
If you let your property furnished or part-furnished, you'll need contents insurance to protect the items you provide. This typically covers:
- Furniture (beds, sofas, tables, chairs)
- White goods (washing machines, fridges, cookers)
- Carpets and curtains
- Other landlord-owned fixtures and fittings
Contents insurance for landlords differs from standard home contents insurance. It's designed for items owned by you, not your tenants. Your tenants should arrange their own contents insurance for their personal belongings.
Some policies also offer cover for malicious damage by tenants, though this is often an optional extra with specific terms and conditions.
Loss of Rent Protection
Loss of rent cover (also called rental income protection) pays out if your property becomes uninhabitable due to an insured event. For example, if a fire makes the property unsafe to live in, this cover would replace your rental income while repairs are carried out.
Most policies provide cover for a set period, typically 12 to 24 months. The amount payable is usually based on the actual rent you were receiving at the time of the incident.
- Check the indemnity period (how long cover lasts)
- Ensure the sum insured matches your annual rental income
- Understand what events trigger the cover
- Check if there's a waiting period before payments start
Property Owners' Liability
Property owners' liability insurance protects you if someone is injured at your property and you're found legally liable. This could include:
- A tenant injured due to a defect in the property
- A visitor who trips on a broken step
- A contractor injured while working on the property
Most policies provide £2 million to £5 million of cover. Given the potential costs of personal injury claims, this is an essential cover for any landlord.
Note that property owners' liability is different from employers' liability, which you'd need if you directly employ anyone (such as a cleaner or gardener) at the property.
How Much Does Landlord Insurance Cost?
The cost of landlord insurance varies significantly depending on several factors:
- Property type: Flats, houses, and HMOs have different risk profiles
- Location: Flood risk, crime rates, and subsidence affect premiums
- Rebuild value: Higher sums insured mean higher premiums
- Tenant type: Students, professionals, and DSS tenants are rated differently
- Cover level: More comprehensive policies cost more
- Claims history: Previous claims can increase premiums
As a rough guide, basic landlord insurance for a standard buy-to-let property might cost anywhere from £150 to £400 per year. HMOs and higher-risk properties can cost significantly more. If you own multiple properties, a property portfolio policy may offer better value.
Choosing the Right Policy
When comparing landlord insurance policies, don't just look at the price. Consider:
- What's included as standard vs optional extras
- Policy excesses and how they apply to different claim types
- Any exclusions that might affect your property
- The insurer's claims process and reputation
- Whether the policy covers your specific tenant type
- Unoccupancy clauses (how long the property can be empty — see our guide to <a href="/knowledge-centre/unoccupied-property-insurance-guide">unoccupied property insurance</a>)
Working with a specialist insurance broker can help you navigate these complexities. A broker can search the market on your behalf, explain the differences between policies, and ensure you have the right cover for your specific situation.
Important Disclaimer
This article is for general information only and does not constitute insurance advice. The specific terms, conditions, and exclusions of any policy will vary. Always read your policy documentation carefully and speak to a qualified broker for advice tailored to your circumstances.
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