What is Landlord Insurance and What Does It Cover?

Answers to some of the most frequently asked questions about landlord insurance in the UK.

For anyone just starting out as a landlord, there’s an awful lot to learn. Paperwork to sign, boxes to tick, and countless arrangements to be made, it can be an overwhelming experience. Given that there’s so much to do, it’s no great surprise that, from time to time, something important is overlooked.

For those attempting to get themselves organised from the off, and ensure that all is in order, landlord insurance is an important consideration. You don’t require specialist cover – legally, at least – but for anyone just starting out, it’s crucial to understand the differences between standard home and landlord policies – and the risks involved in being under-insured.

Organising the appropriate insurance cover is a box that must be ticked and an important consideration that shouldn’t be overlooked. Just starting out as a landlord? Consider the following questions.

Do I need landlord insurance?

In a word, yes. Your insurance cover should be tailor-made and specific, covering the associated risks that are inevitable when renting out a property. You might think that regular home cover is sufficient, but insurers might reject claims on properties that are let out to tenants, leaving you out of pocket and in a financial pickle.

In addition, those applying for a buy-to-let mortgage often find that lenders stipulate that specialist landlord cover is in place prior to agreeing a loan. The best advice is to organise landlord cover from the outset, read the small print and ensure your policy is fit for purpose.

Is it a legal requirement to have cover?

This is where it gets confusing, because in the UK, there’s no legal requirement for landlords to organise specialist cover on their rental properties. It might seem tempting to cut a corner and save a little money, especially with all the costs involved in becoming a landlord.

But make no mistake about it: those thinking about treading such a path are taking a great risk indeed. You could choose to take that chance and not invest in insurance – and no laws are going to be broken. But if anything goes wrong – as so often tends to happen when tenants are involved – you will be the one who foots the bill. 

What’s the difference between landlord insurance and home insurance?

Calculating landlord insurance

The most important difference is that, should a landlord make a claim on a standard home policy, there’s a good chance the insurer will refuse to pay out. Rental properties are riskier for insurers, but the additional liabilities are built into landlord policies – hence the additional costs involved.

Think about fires and flooding, damage to fixtures and fittings and the possibility that your tenants won’t treat your property as well as you would, and it becomes a no-brainer. Organise tailor-made landlord insurance and you’ll be covered for all eventualities, whereas a standard home policy just won’t cut it. 

What does landlord insurance cover?

Landlord insurance varies, depending on the provider and the level of cover taken out, but as a general rule, the structure of the building (up to a certain amount) and fixtures and fittings, should they become damaged in a fire, flood, storm or accident, will all be covered.

You might choose to add contents cover to the buildings policy, which is often a wise move, especially if you’re renting a furnished property, but contents belonging to your tenant should be covered under their own insurance, which isn’t the landlord’s responsibility. There are optional extras that can be added in so do a little research and find out what is available.

Can I add in optional extras?

Yes! Optional extras can include cover towards the loss of rent, or alternative accommodation costs, should your property become uninhabitable following an insurance claim. Cover can also include replacing keys and locks, provide a rent guarantee to recover arrears owed, guard against emergencies, malicious damage and more.

Generally speaking, the greater the premium, the more protection you’ll have and, while there’s no need to include everything, it’s well worth looking at all the options and figuring out which ones are sensible to include. It might seem like a significant outlay, but ensuring appropriate protection is in place from the start can save landlords a packet in the long run.

Can I get a discount if I’m insuring multiple rental properties?

Keeping costs down is important, this we understand. But get organised and there are some simple steps that can be taken to reduce your insurance outgoings. For landlords with multiple rental properties, combining cover can lead to a significant discount, so be sure to shop around and always seek the best deal.

Organise insurance renewals on all your properties on the same date and you’ll have peace of mind, knowing all is in order and nothing important has been overlooked.

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