If you rent one property or a whole portfolio, you’ll need more than just home insurance
151% of customers paid up to £25.3 a month direct debit for a standard buildings cover policy when paying monthly, between October and December 2023.
2Correct as of February 2024
Landlord insurance, also known as buy-to-let insurance, is a specialised type of home insurance designed to protect landlords who rent out their properties to tenants
It protects against potential risks associated with letting a property, including property damage, liability, and loss of rental income.
With landlord insurance, owners can ensure they have the necessary financial support to manage claims and make repairs promptly, minimising any delays in restoring the property to its proper condition.
Landlord insurance isn’t required by law, but it’s strongly recommended for anyone who has a rental property or a portfolio of properties to protect against financial losses and liabilities associated with renting out a property.
Disasters: such as storms, fires, and floods
Deliberate vandalism: by vandals or burglars, or in a riot
Burst pipes and boiler trouble: including escaped water or boiler breakdowns
Other issues: e.g. locks being replaced, lost keys, and alternative accommodation
General wear and tear: such as worn carpets
Deliberate damage by tenants: e.g. graffiti or damage to fixtures
Your tenants’ possessions: like laptops or phones
Any damage caused by pets: including scratch marks
Accidental damage cover: such as broken windows or stained carpets
Tenant default insurance: provides cover if tenants don't keep up with payments
Property owner's liability: if a third party suffers injury or damage on your property and seeks compensation
Home emergency cover: includes call-outs for issues such as burst pipes or broken electrics
Legal expenses cover: including rent recovery and tax affairs
Unoccupied property cover: can cover unoccupied properties for up to 60 days
Rental income protection: provides cover if damage to your property prevents you from renting it out
Commercial buildings: your insurer can provide tailored commercial buildings cover
If you’re renting out a property, then it’s inevitable that something will get damaged. Your tenants are living their lives in your property, and so even the most reliable will end up scratching some paintwork, or leaving a few dents or scrapes. If you have full landlord insurance then you will be covered, giving you peace of mind. You could even be covered for things like loss of rental income."
Insurers take into account how old your property is, how many rooms it has, how its roof is structured, and more to judge what kind of risk it presents
If you’re in an area with high crime rates or a greater likelihood of flooding, you’ll usually pay more for cover
If you’re letting your property out to students, you may have to pay more for cover as insurers are likely to consider these tenants as a higher risk
A combined buildings and contents policy may be cheaper overall than buying them separately, but it’s good to compare your options to be sure
You might find that paying your premiums as an annual lump sum works out cheaper than spreading the cost over monthly instalments
A history of previous claims on your landlord insurance policy will make you a higher risk, so insurers will likely charge more in premiums
Comparing quotes is one of the first ways you can save money on your policy. There is a lot of choice out there when it comes to providers, so make sure you get a good view of your options
Increasing your voluntary excess will reduce the cost of your landlord insurance policy. However, you should avoid increasing your excess to a point that it becomes unaffordable
Rebuild cost isn't the same as market value. By calculating how much it would cost to rebuild your property, you can avoid over-insuring yourself and get better value for your cover
Providers may reduce the cost of your policy if you are taking proper steps to secure your property. This includes installing burglar alarms, CCTV, and upgrading the locks on doors and windows
Including the address, date of purchase, when it was built, and if it's commercial or residential
Such as their employment status or any background checks you may have carried out on them
Select your level of cover as well as any optional extra cover, such as contents insurance
Basic details of your existing policy, including any previous claims history
A standard home insurance policy might not cover you if you rent your property out to tenants and you aren’t living there. This is because tenants present a different, and usually greater, risk to the property – and therefore to the insurer:
Tenants aren’t invested in the property, so they may not care as much about its condition
They may not notice certain maintenance issues that could grow if left unattended
They may cause malicious or accidental damage to the property
They may hold you, the landlord, liable if they get hurt in the property
Landlord insurance caters to these specific situations that won’t usually be covered by standard home insurance.
Most insurers offer the option of adding multiple properties to your policy, and you may even be able to get a discount on your premiums as a result. However you may find that you need separate policies for each property, so it’s always better to compare your options before committing to a provider to ensure you’re getting the best deal.
You might need contents insurance as a landlord if you’re supplying furniture, fixtures and fittings for your tenants. For example, a landlord contents policy can help with freestanding sofas and beds, floor coverings and electrical appliances. You can generally expect the following to be covered either as standard or with an add-on:
Furniture such as sofas and cabinets
Kitchen appliances like ovens or sinks
Paintings and pictures
Outbuildings such as sheds or outhouses
Gardens and any contents in the garden
Communal areas, if you’re letting your property out to multiple tenants
You might also be able to claim for alternative accommodation for your tenants if any damage to your contents renders the property uninhabitable.
Landlords are generally able to claim a tax deduction for the running and maintenance costs of their property, which includes landlord insurance, as well as:
General maintenance and repairs
Water, gas and electricity
Maintenance services like and gardeners
Letting agent fees
Property management fees
The first £1,000 of your property rental income is your property allowance, and therefore it’s tax free. Your total rental income added together, minus all your allowable expenses (including landlord insurance) will give you your profit or loss.
For profit margins of £1,000 or less, you just need to claim for your allowance.
For profits of between £1,000 and £2,500 you need to contact the HMRC to ensure you’re paying the correct tax
For profits of between £2,500 and £9,999 after expenses, or £10,000 or more before expenses, you’ll need to report the income on a self-assessment tax return.
If you live in the property and you are renting a room out, you should clarify whether the agreement is that they are a tenant or a lodger. Essentially, if you’ve agreed you cannot enter their room without their permission this would make them a tenant – and therefore you’d need landlord insurance to be properly covered.
If they’re a lodger then you should be able to get an extension on your home insurance policy that will cover you for housing a lodger.
As a landlord there’s always a risk that a tenant might refuse or not be able to pay rent. While this can cause problems, there are things you can do to protect your rental income – you can see what your options are with our guide to rent guarantee insurance.
Rental guarantee insurance usually covers six or 12-month periods, though an excess of one month’s rent is not uncommon.
Loss of rent will protect the income you receive from your tenants if they have to move out due to an insured event. This can include such events as a fire, flood, or robbery. As well as compensating you for the loss of rent, this insurance will also help you cover the cost of alternative accommodation for your tenants.
Legal expenses are not usually covered as standard with landlord insurance. Instead, this cover is offered as an optional extra that you can add to your policy for an additional cost. It will cover you for any legal fees related to your property. This can include such issues as contract disputes and debt recovery.
When you sign up to your landlord insurance policy, you should receive a booklet that outlines the detail of your policy, which usually comes with a claims form. You can claim by filling it out and mailing it to your insurer, though they may also be able to handle your claim online or over the phone.
Boiler cover isn’t a legal requirement as a landlord, but it can help keep your property habitable for tenants and prevent any headaches if the boiler does break down.
In most cases, the landlord will pay for buildings insurance. As a landlord, you may even be required to purchase it before getting a buy-to-let mortgage, depending on the lender's terms and conditions.
Finding the right policy for your properties and your own individual needs is crucial. Take a look at our landlord insurance guide to make sure your policy covers all the bases.
When you’ve decided on the level of cover you need, find the best landlord policy for your requirements via our preferred provider. MoneySuperMarket has teamed up with Simply Business, who offers an external landlord insurance comparison service. Simply Business is Authorised and Regulated by the Financial Conduct Authority (FCA reference 313348)
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