What insurance do I need as a landlord?

What is landlord insurance?

Landlord insurance is a type of specialist insurance that’s designed for rental properties. It offers protection for your property and a tailor-made policy to suit your needs as a landlord. For example, it often covers the cost of legal disputes with tenants and unpaid rent.

Is landlord insurance a legal requirement? 

While landlord insurance isn’t a legal requirement, it may be a condition of securing a buy-to-let or landlord mortgage. Not only that, but it gives you added protection that you won’t find in standard home insurance policies.

Insuring your rental properties gives you a safety net that protects your finances, your property, your reputation and more.

Buildings and contents cover

Standard home insurance policies cover your buildings and contents. However, they won’t cover intentional damage caused by your tenants. No matter how careful you are with choosing your occupants, there may be an occasion where they smash a window, break a door or worse. This is where landlord insurance comes in.

You don’t need to worry about your tenant’s belongings. Anything they own is their responsibility to cover, even if it’s furniture that they bring to your home.

Loss of rent

One thing you may not realise landlord insurance can cover is loss of rent. Missing out on rent can incur a great financial loss, especially if it spans across many months or multiple properties.

There are two main reasons why you might not receive rent. Your tenant might default (fail to pay) or your property may become unfit to live in after an event (like a fire or a flood). If you’re looking to get cover for both, you’ll need rent guarantee (which covers tenants not paying) and rent protection (which covers uninhabitable properties). Some insurance providers will only offer one or the other, whereas some will offer both.

On top of this, you might wish to consider alternative accommodation cover. This covers the cost of any alternative accommodation you arrange for your tenants if they can’t safely stay in your property. It keeps your tenants under a roof while you have the time to deal with your property issues.

Property owners’ liability

Accidents happen. That’s why it pays to have property owners’ liability cover. If a tenant is injured or has an accident on your property or because of your property, you may have to pay them costs or damages.

With property owners’ liability cover, you’re insured up to the advised amount. If you don’t have sufficient cover, you’ll have to pay out of pocket. This can add up to a substantial amount, especially if you’re taken to court and have to pay legal fees and defence costs too.

This cover is usually included in a landlord insurance policy, and it will protect you from a range of claims. For example:

• If a tenant trips over a loose floorboard and severely injures themselves
• If roof tiles fall onto your tenant’s car and smashes the windscreen
• If a gas explosion damages your tenant’s belongings and causes serious injury

Legal expenses

As well as public liability cover, you may wish to add legal protection to your landlord insurance policy. It often comes at an additional cost, but you’ll likely save money if you have to make a claim.

It covers the costs associated with legal disputes, whether the claim has been raised by you or your tenant. For example, evictions, late or withheld payments or violation of the lease agreement.

Unoccupied property insurance

If your property is likely to remain vacant for a while, you might want to take out unoccupied property insurance. This is separate from landlord insurance and protects you against theft and vandalism while your property is empty. It also covers damage from natural disasters and gas and oil leaks.

It’s useful to have this cover if you’ve recently bought your property and are still looking for tenants, rent to students who go home during university breaks or you often find yourself in-between tenants. Empty homes carry a higher risk of break ins and vandalism, which is why it can pay to get additional protection.

Our guide to unoccupied home insurance explains everything you need to know about insuring an unoccupied residential property.

Getting insurance for your properties

Now you’ve seen the main types of cover landlords need, it can help to review your portfolio to see what’s right for your properties.

If you’re ready to protect your properties or become a first-time landlord, why not explore our range of insurance and mortgage products below?