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What is Landlord Insurance?

January 31, 2018

If you rent out a property, then you really should take out insurance to cover you should something go wrong.

What if your rented property was flooded?  Would you be able to afford to repair the damage and find alternative accommodation for your tenants?  Or what if your tenant stopped paying the rent?  If you rely on your rental income to meet your mortgage repayments, you could end up in a serious financial mess.

If you let a property but just take out standard insurance in your name, there is a very big chance the insurance company will refuse to pay any claim and therefore you will be out of pocket.  You need insurance that is specially designed for landlords.

There are a lot of insurance companies that specialise in landlord and tenant insurance.  The extent of the cover varies, so it is very important to compare policies carefully and remember the cheapest is not necessarily the best.

A good policy will insure the building, landlord liability and loss of rent.  You can also take out extra cover for contents, home emergency, rent guarantee and legal protection.

Buildings Insurance

Your rental property is a very valuable asset, so unless you have pots of cash, you would be crazy not to take out buildings insurance to cover the structure of the building, plus any fixtures and fittings, should they be damaged by a variety of risks such as fire, flood and storm.

If you have a mortgage on the property, your mortgage provider might insist on appropriate buildings insurance as a condition of the mortgage.

Sum Insured

Check the sum insured (the maximum amount you can claim should the property be completely destroyed) is right, if it is too small, you risk a shortfall in the event of a claim and if it’s too much, then you maybe paying too much in premiums.

The sum insured should reflect the rebuild cost of the property and not the market value should it be sold.  If needs be, arrange for a surveyor/professional to assess the rebuild cost or the insurer should be able to make an estimate based on a few factors such as age, type of property.

There are insurance companies that offer unlimited cover, therefore you will not need to worry about working out a realistic rebuild value.

Contents Insurance

If you let your property furnished, then this policy is a must.  Make sure the policy insures your belongings on a new-for-old basis, consider adding accidental damage cover and choose a realistic sum insured based on the value of the contents.

Even if you let your property unfurnished, you should still consider contents cover.  You might want to cover floorings, curtains, light fittings, kitchen appliances, so a small amount of cover would give you peace of mind.  Remember the tenants are responsible for insuring their own possessions, so do not include them in your calculations.

Landlord’s Liability

Tenants are becoming more and more legally clued up, so you need to be aware of your legal liabilities.  For example, if a tenant was injured by faulty wiring or tripped on frayed carpet and fell down the stairs, they could sue for damages.  You might also be in trouble if you damaged another person’s property or a contractor 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, should you end up in court.

Rent Guarantee

This is one of the most under rated insurance policies.  If your tenant stopped paying their rent, you have the right to legally evict them for non-payment of rent, however you do need to follow the correct legal procedure.  This can be lengthy and very costly.  Not only will you be losing your rental income, you will have to pay court costs, solicitors fee and possibly bailiffs fees.

Rent Guarantee insurance will cover the rent (up to a certain amount for an agreed period) and this usually includes the legal expenses insurance, therefore you won’t have to pay the legal costs and will offer you a financial lifeline for a fraction of the cost.

Malicious Damage

Buildings insurance policies often cover damage by a tenant, just in case your tenant decides to go crazy and cause damage to the property.  Many insurers will also offer glass, lock and key replacement cover as standard.

Loss of Rent

It is a very good idea to choose a landlord insurance policy that covers loss of rent.  If the property was to become uninhabitable after damage from a fire or flood, you could then make a claim.  Some policies also cover the cost of alternative accommodation for your tenants if they have to move out of the property, although there will be a limit to the maximum you can claim.

Hopefully, this guide will give you a good insight into what insurance policies are available to you as a landlord.

Should you wish to find out any further information on any of the above policies, please either send an email to or give us a call on 01243 788257.


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