Landlord insurance protects property owners from financial losses associated with renting out a property.
It’ll provide theft, fire and weather damage cover for the structure of the rental property and any contents owned by the landlord that are within.
It’s slightly different to standard home insurance as it also covers risks specific to renting out a property, like loss of rent and legal expenses, but they might not be included as standard on every landlord insurance policies.
It's not a legal requirement, but it can help protect your property from all sorts of risks that come along with being a landlord, from careless tenants to general maintenance and emergency household faults.
Most mortgage providers will insist you have landlord insurance in place if you’re buying a property to let it out.
Don't rely on ordinary home insurance either, as generally you won't be covered if you rent out your house or flat. It won't cover things like unpaid rent or malicious damage caused by a tenant - all things that can be added to a landlord insurance policy.
If you’re renting out a leasehold flat in a block of flats, it’s likely that the freeholder may already have arranged buildings insurance but it is worth checking.
Depending on what type of cover you select, most policies will usually include cover for the following as standard
Much like a typical buildings insurance policy, landlord buildings insurance can help cover the cost of repairs in the event of damage to the structure of your property. It’ll usually cover damage by events such as fire, flooding, subsidence, theft or vandalism.
Landlord contents insurance is much the same as you would expect from a standard contents policy, keeping the items you own within the rental property covered – things like furniture, appliances and garden contents.
If the property you're renting isn’t furnished, you don’t need your own landlord's contents insurance. Tenants should have their own contents insurance for items they keep in the property.
Whether it’s a burst pipe, power outage or boiler failure, landlord home emergency cover safeguards your property with 24-hour support and assistance, protecting your tenants and your premises at the same time.
Your insurer will pay out to cover your rental income if, for example, your tenants need to move out due to an insured event, like a flood or fire. Loss of rent cover can also help with the cost of arranging alternative accommodation for your tenants.
Rent guarantee insurance will cover the cost of rent that isn’t paid to you by your tenants. You can usually claim on it after your tenants haven’t paid rent for a few months, despite mediation, and you now want to start the process of evicting your tenants for non-payment.
Property owners' liability insurance pays out if someone claims against their landlord or property owner due to personal injury or damaged belongings on their property.
Employer’s liability insurance will cover the costs if your employee gets ill or injured because of their work for you. It’s usually a legal requirement, unless you’re running an unincorporated family business.
Legal expenses insurance can help to recover legal costs as a result of things like pursuing unpaid rent, tenant personal injury claims and eviction.
To get your landlord quotes, you’ll be asked for a few details about the following:
Whether it’s a residential or commercial property, the type and age of the building and any materials used for construction
Their employment status and any background and identity checks you’ve ran
Do you need buildings and/or contents insurance? Plus any addons you need
Details about any claims made in the time you’ve owned the property
Whether you’re looking to pay your premium monthly or annually
The cost of your landlord insurance will depend on things like how much rent you charge, the type of property it is, its age, the details of your tenants, the type of cover you want and whether you’ve made any previous claims.
On average combined buildings and contents insurance for landlords costs around £201, and for landlord buildings insurance only it costs £172 on average.
The cost of your premium may vary depending on the level of cover you choose, the type of property you're letting out and your tenants’ situation.
Here some tips that may cut the cost of landlord insurance:
Landlords have a variety of insurance needs, including building cover, contents cover, liability insurance and accidental damage cover. Some policies will package these together to offer better value for money, or have specific clauses built in that negate the need to take out added cover elsewhere.
Specialist landlord insurance brokers may well prove better able to give quotes without unnecessary bloat, so shop around for cover.
It's important that you get the most realistic figure possible. Underestimate it and you could be left out of pocket should the worst happen; overestimate it and you're needlessly paying a premium.
For landlords able to shoulder the cost of smaller claims from their cash-flow or savings, this can be an effective way of bringing policy costs down.
If your property is unfurnished, or is furnished only with items you have no real concern for (old carpets, cheap appliances, etc), you might consider bypassing contents insurance altogether, if you believe the cost of the policy would outweigh any benefit in a claim.
Ensuring your property is equipped with an alarm and has solid locks on doors and windows will help reduce the risk associated with burglary, therefore reducing your premium.
Your insurance costs are more likely to rise if your tenants have pets, purely because the animals may make a mess that would require a claim of some sort (ruined carpets, for example).
Students and DSS tenants bring associated risks and therefore policies encompassing these demographics will be higher.
Generally, insurers aren't keen on providing cover for a property that will sit empty for extended periods of time (usually more than 30 consecutive days). This is because there's an increased risk of vandalism and burglary.
However unlikely making a claim may seem now, you'll be sorry later if you're not adequately protected and end up footing an enormous bill for the sake of saving a few pounds on insurance.
As always, the age-old advice is to shop around. While landlord insurance is a more niche type of insurance than car or home insurance, there are still a number of providers out there vying for your business.
The Coronavirus Act 2020 prevented landlords from starting eviction proceedings unless they gave tenants six months’ notice, but those measures expired on 31 May 2021. Now landlords in England must give tenants four months notice before starting eviction proceedings, although it's still six months notice in Scotland and Wales.
Contact your mortgage lender if you’re struggling to meet repayments. They may be able to help you by offering a payment holiday or other measures.
First get in touch with your insurer – you might need to fill out a claims form yourself, or you might be able to get help with this over the phone.
Your insurer should give you advice on what to do next and how to pay the excess to get the claims process started. You might also be asked to send over any documents or evidence to support your claim or even have a visit from a claims assessor.
It’s not legally required, but if you’re leaving furniture or other household items in the property for your tenants to use then you might want to consider it to protect your possessions.
Make sure you have a record of previous rental payments and the ones they’ve missed. You can start by talking or writing to your tenant to see what’s going on.
If the tenants' circumstances have changed – for example, they’ve lost their job – and you have a good relationship with them, to help them get back on their feet you could reduce their rent for a short time and prompt them to explore whether they’re eligible for housing benefits. If they still can’t pay, let them break their contract and leave.
Tenant not responding and still not paying? You could contact their guarantor to see how else you might contact your tenant (but don’t mention the rent arrears).
If all reasonable attempts have failed, you might want to consider evicting your tenants and reclaiming your property either with a Section 21 Notice (your tenant will have two months to leave and you won’t be able to claim back unpaid rent) or going through the courts.
It’s not a legal requirement to have boiler cover but you are responsible for the repair of heating, hot water, gas appliances, pipes, flues, ventilation, wiring, and sanitary fittings – so boiler cover could come in handy.
You’re also responsible for getting an annual service for the boiler and other gas appliances to make sure it’s all safe and you must keep records of these checks for at least two years.
Because each of your properties has a different location and tenants, insurers will calculate the risks and premiums differently.
Therefore, to insure multiple properties you’ll need to run an online quote for each property separately.
Properties undergoing renovations or in a poor state of repair are considered high risk. As such, you may have a fewer number of insurers willing to insure you.
Properties left unoccupied for an extended period will need to be covered by a specialist insurance policy. This is known as unoccupied home insurance and it’s suitable for landlords whose properties are empty for 30 or more days.
This may be applicable to you if your property is in between tenants or refurbishing.
For your unoccupied property to be covered, your insurer might have additional rules, like you might need to turn off the gas and electric, regularly inspect the property or add extra security measures.
You'll technically be known as a resident landlord and you'll need to speak to a specialist insurer to see if you need landlord insurance.
Even if your standard home insurance policy can cover you, premiums may go up because you're sharing your residence.
Landlords in England and Wales have a legal obligation to:
It’s unlikely that your insurer will cover a property that houses a tenant you can’t provide a tenancy reference for, as it would probably be a huge risk in the eyes of your insurer.
Your insurer might insist upon some or all of the following:
You can get specialist landlord insurance to cover property rented out to students. You’d have to check your standard landlord insurance policy to see if students are covered.
This depends on the property structure, building materials, how much rent you charge, the tenants you have and whether you have any of your own contents in the property you’d like to cover.
You might need specialist landlord insurance for houses in multiple occupation (HMO) to cover a property that has more than one tenant.
Average cost of combined buildings and contents policies bought through Simply Business between 1 January 2021 to 31 December 2021was £201.72. For landlord buildings only insurance, it was £172.60.