What is landlord insurance?
Landlord insurance offers specialist cover for your rental property. Different policies will have different levels of cover, but a policy could cover things like
- loss of rent
- contents
- damage to your property
- claims made against you if someone is injured or their property is damaged
Is landlord insurance a legal requirement?
Although there’s no legal requirement for a landlord to have a landlord insurance policy, a normal home insurance policy won’t cover you if you are renting to tenants. If you let to tenants without dedicated landlord insurance you are running a risk.
Also, if you have a mortgage on your property, your mortgage lender might require you to have a valid landlord insurance policy before you let to tenants.
You may also need to have written permission from your mortgage lender before you let your property, so it’s important to make sure otherwise you might find yourself breaking the terms of your mortgage.
Why do you need landlords insurance?
Landlords insurance can help to give you peace of mind that your rental property is protected when there are other people living in it, and even when it is vacant between lets.
If you let a property but just take out standard home insurance in your own name, the insurance provider could refuse to pay any claims you make when the property is being lived in by tenants.
If you want a buy-to-let mortgage, your lender might require you to have it in place to give you the extra cover needed for things like tenant damage to your property and rehousing costs - which regular home insurance doesn’t cover. If you don’t have the cover they specify, they can refuse to extend you a loan.
What does landlord buildings insurance cover?
Landlord buildings insurance typically offers buildings cover up to a certain amount (the sum insured) to insure the structure of the building, plus any fixtures and fittings, should they be damaged in a fire, flood or storm or an accident.
Do landlords need contents insurance?
You might find landlord building insurance covers you to a level you are satisfied with, but if you are letting a furnished property and want cover for all of it, contents insurance is a must.
The majority of landlord insurance policies will include contents insurance, others you may have to select it as additional cover.
You should still consider contents cover even if you’re letting an unfurnished property. Contents cover should include curtains, carpets, white goods and other kitchen appliances, so a small amount of cover would offer significant peace of mind if they were damaged. However only one in four landlords actually request a contents policy as part of their landlords insurance, according to CIA Insurance data.
Any contents that belong to the tenant will need to be covered by the tenant with a tenant’s insurance policy.
What other things does landlord insurance cover?
As always, it’s important to check the details of the policy you choose, but in general these are the types of things a landlord insurance policy would cover as standard.
- Malicious damage: Landlord insurance should include cover against malicious damage by a tenant. This covers you against any intentional damage to the building and/or its contents, for example if any windows are purposefully smashed or any of your contents are stolen.
If you believe the damage to your home was carried out with malicious intentions then you should report the incident to the police. Your insurer might ask you for a criminal case number.
- Loss of rent: Landlord insurance that covers loss of rent lets you claim if the property becomes uninhabitable after damage from a fire or flood, for example, and your tenants have to move out during repair work – which means you aren’t getting the rental income you need to pay the mortgage.
You should always check the maximum loss of rent pay out to make sure your monthly mortgage costs would still be covered.
Some policies also cover the cost of alternative accommodation for your tenants if they have to move out of the property for repairs – but there will also be a limit to the maximum amount you can claim.
- Landlord’s liabilities: If, for example, a tenant was injured by faulty wiring or tripped over a broken floor tile while living at your property, they could sue for damages. You could also be in trouble if a tenant’s personal property was damaged while living at your property, or a repair worker was involved in an accident while working at the rented accommodation.
Damage claims can be costly, but most landlord insurance policies offer liability cover up to £2m, just in case you end up in court. Read more about your responsibilities as a landlord.
- Vacant properties: Landlord insurance for vacant properties can also offer cover for rental properties that are left unoccupied for up to 90 days - and sometimes 120 days if you’re letting your home out as a student let property. This can help to give you peace of mind that your property is covered during gaps between tenancies and university holidays.
Optional landlord insurance cover
Some landlord insurance providers will also offer optional cover for things like:
- Rent guarantee: Landlord insurance with rent guarantee can help to cover unpaid rent up to a certain amount, and over an agreed period where a tenant can’t pay. This can help to make sure you meet mortgage payments. It also usually includes legal expenses insurance, so your legal costs will be met if you are involved in a dispute with your tenant. Less than 1% of landlords request this policy, according to data from CIA Insurance.
- Home emergency: Home emergency cover protects you and your tenants during unexpected emergencies. Landlord insurance home emergency cover can provide boiler cover when there are plumbing and heating system problems, drain and sewer blockages, pipe and gutter problems, vermin infestations, door and window security problems and more. Landlord insurance home emergency cover gives you access to a 24-hour helpline so you can arrange for emergency repairs to be carried out by qualified tradesmen.
- If you don’t employ a managing agent, home emergency cover can be invaluable.
- Key care insurance: If your tenants lose or break their keys, or they are stolen, key care insurance can cover you for any costs you have to pay out for a locksmith, replacement locks and new keys.
Landlord insurance for multiple properties
Landlord insurance providers might also offer discounts on insurance policies that cover multiple properties. You can also choose to renew the insurance for each of your properties on the same date, to give you peace of mind that each of your homes is covered.
Compare landlord insurance quotes
MoneySuperMarket works with a variety of landlord insurance providers to keep your home protected, so it makes sense to compare landlord insurance policies to help find the best cover for your letting property.
When comparing landlord insurance policies, it’s a good idea to think about what level of cover you need. Some providers will include things like accidental damage, loss of rent and alternative accommodation as part of their standard cover, whereas other providers might offer them as optional cover that you need to pay extra for.
It’s also a good idea to compare the landlords buildings insurance maximum cover – sum insured – to check that it would cover the costs to rebuild your home following a catastrophic event.