The quick guide to landlord insurance

Estimated read: 5 minutes

If you are a landlord, you might be wondering why you might need specific insurance. It is not compulsory, but there are several good reasons to considering getting landlord cover to help you stay protected. We discuss what landlord insurance can cover and some other important points to consider.

Some mortgage providers require it.

If a buy to let mortgage provider has lent you thousands of pounds, there is a good chance they will want you to insure it. Many require you to get insurance as part of their mortgage terms.

Protect your investment.

Your property is worth a lot of money.  Buildings insurance can protect you against things like flood or fire and damage that may cost you to put right if you did not have cover. If your property is furnished, contents insurance can cover you if things like furniture or appliances are damaged. If you do not insure yourself, you may have to pay thousands of pounds of damage if something goes wrong.

Insure yourself against loss of rent.

What would you do if your tenant stopped paying rent? Some landlord insurance packages offer rent protection insurance in the event the unexpected occurs and your tenant is unable to pay. If you financed your property with a buy to let mortgage, you could lose it if you are unable to keep up with the payments.  

Cover against legal costs and injury claims.

No matter how diligent you are, accidents can still happen. If a tenant had an accident on your property and they held you liable, they may decide to sue you for negligence. Liability cover can protect for this if it does happen. If you are held liable for a criminal offence, you may be able to get legal cover to defend you in court and cover you for legal costs. Legal cover may also cover some of the costs of evicting tenants.

Cover for home emergencies.

If your insurance package includes home emergency cover, you can get protected for emergencies in your property. Typical events covered could be things like your boiler going down, an electricity failure or blocked drains. This type of cover could be especially useful in cases where paying for an emergency call out from a tradesman would otherwise cost you £100s.

Accidental damage.

If your property is regularly occupied with tenants, there is a high chance at some point of your tenant damaging your property, such as a spillages and breakages. Bear in mind that the damage would have to be accidental in order to be covered.

What standard landlord insurance might not cover.

Cover will vary from insurer to insurer. There are some things however that are generally not covered or that you may need to notify your insurer about:

  • If your property will be unoccupied for an extended period of time, not all insurers cover this.
  • If your tenant type changes. Some insurers only cover specific types of tenants (such as professional tenants or students). If you are thinking of getting a different type of tenant in after your cover has started, be sure to let your insurer know.
  • Subletting your property. This is where the property is leased out to someone other than the tenant. Most insurance policies (and mortgages) do not allow this. If you or your tenant is intending to sublet, be sure to check that you are covered.
  • If you intend to also use your property as an Airbnb, many landlord insurers will not cover this and you may need to find cover through a specialist insurance broker. Check out our landlord article about Airbnb.
  • If your house is in multiple occupation (HMO). This is a property owned by a private landlord and shared by multiple people. It generally applies to properties with shared communal areas where the number of tenants would be considered as a multiple household living under one roof. This could apply to a number of different properties including bedsits, shared houses and hostels. If you are considering turning your property into an HMO, you will need specialist insurance for this.
  • Tenant belongings. This wouldn’t normally be covered by landlord insurance. Your tenants will be responsible for insuring their own possessions.

Think about what you need cover for.

The important thing to think about is what you actually need cover for. Is loss of rent protection important to you? Are you worried about tenants accidentally damaging your property? Not all landlord insurance policies have the same cover. Make a list of everything that is important to you and this should help you when you go shopping for insurance.