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The ultimate guide to landlord insurance

6-minute read

Tenants moving in to a new rental property
Conor Shilling

Conor Shilling

1 July 2022

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Having the right landlord insurance is a crucial part of renting out your property. But what covers do you need, what can you claim for, and how much does it cost?

Read our ultimate guide to landlord insurance to make sure you have the right level of cover to protect your investment if the worst happens and you need to make a claim.

What is landlord insurance?

Landlord insurance is similar to home insurance, but it covers the unique and additional risks associated with renting out a property.

A landlord insurance policy is there to protect your most valuable asset and give you peace of mind that you’re covered financially against things like fire, flood, and theft.

You can also take out insurance to protect you against things like accidental damage, unpaid rent, and legal expenses.

Landlord insurance isn’t a legal requirement, but most mortgage lenders will require that you have specialist landlord cover in place if you let your property.

Why do landlords need insurance?

Owning a property comes with a range of risks, such as being broken into, or being damaged by a fire or flood.

If one of these things happens to your property, the cost to repair or replace damaged or stolen parts of your property is likely to be high.

Having landlord insurance means you don’t have to worry about finding the cash to pay for unexpected costs if the worst happens.

When you rent a property to tenants, there are also other risks you need to think about such as accidental damage or unpaid rent that stop you from paying back your buy-to-let mortgage.

Specialist landlord insurance is designed to cover these unique risks and allows you to focus on managing your tenants, maintaining your property, and getting the most out of your investment.

What are the main types of landlord insurance?

Most landlord insurance policies include at least buildings insurance and property owners’ liability insurance. You can then choose to add other landlord insurance covers to your policy.

Here’s a summary of the most common types of landlord insurance and what they cover:

  • buildings insurance – if your property is damaged by something like fire, flood, or vandalism, this cover could pay for repair or rebuilding costs
  • contents insurance – if you want to protect the contents you provide (such as furniture and appliances), this cover could pay for repairs or replacements if they’re damaged or stolen
  • property owners’ liability – if a compensation claim (for injury or damage) related to your property is made against you, this insurance could cover the legal fees and compensation payout
  • accidental damage – if accidents cause damage to your buildings or contents (such as broken doors or a stained carpet), this cover could pay towards repairs and replacements
  • legal expenses – if you need to take legal action related to your property (such as evicting tenants, this insurance could pay towards your legal costs
  • tenant default – if your tenants don’t pay their rent for at least two consecutive months, this cover could protect your rental income

Other types of cover that you could add to your landlord insurance policy include:

Five common examples of landlord insurance claims

All insurance claims are unique, but here are some examples of common claims that could save landlords significant sums of money and help them to keep their rental property running smoothly.

Buildings insurance

A chip pan used by tenants starts a fire at the landlord’s property. The fire causes serious damage to the property’s walls and ceilings, with smoke damage throughout. It also caused damage to the neighbouring property. If the landlord is covered for fire as part of their building insurance, they could make a claim to cover the costs of the required rebuild and repair works.

Contents insurance

During the Christmas holiday, a landlord’s property is hit by a severe storm and flood. The ground floor of the property is badly damaged, including kitchen contents (owned by the landlord), soft furnishings, and other decorative items. If the landlord has contents insurance, they could make a claim to cover the cost of repairs and replacements.

Property owners’ liability insurance

A postman is delivering a parcel to a landlord’s property. A manhole cover gives way and causes him to break his leg. As a result, he hires a solicitor and takes action against the landlord. If the landlord has property owners’ liability insurance, they could make a claim to cover the cost of compensation and legal fees.

Accidental damage insurance

The landlord visits their property a few weeks before their tenant is due to move out. They discover that red wine has been spilt on the carpet in the living room. If the landlord has accidental damage insurance, they could make a claim to cover the cost of cleaning or replacing the stained carpet.

Fixing the door of a rental property

Tenant default insurance

A landlord chases late rent from their tenants for over six months. They can’t contact the tenants and have lost out on thousands of pounds that they would’ve used to pay their buy-to-let mortgage. If the landlord has tenant default insurance, they could benefit from a free legal helpline and make a claim to cover the cost of unpaid rent.

Landlord insurance FAQs

Whether you’re a seasoned landlord or just starting out, identifying what type and level of cover you need can be tricky.

You may also be wondering how much to spend, what you can claim for, and whether landlord insurance is legally required.

With this in mind, we’ve answered some of the questions we get asked most frequently by our landlord customers.

How much does landlord insurance cost?

The best way to find out how much your landlord insurance will cost is to run a quick quote.

The price of landlord insurance depends on the types of cover and the cover levels you pick, as well as details specific to your property like its location, age, and the type of tenants (such as students or families) living there. Things like the security measures you’ve got in place could also make a difference to the cost of your policy.

When insurers calculate your premium they’ll consider how likely you are to make a claim, and the possible cost of any claim.

When you’re buying your landlord insurance it’s important to answer all questions accurately, as otherwise you may not be covered if you come to make a claim.

Does landlord insurance cover wear and tear?

Most landlord insurance policies will cover sudden events that cause damage, such as a fire, flood, or storm.

If damage has been caused over a long period of time and not by a one-off incident, it’ll be considered wear and tear and won’t be covered by your insurance.

Common damage examples that count as wear and tear and won’t be covered by your insurance include:

  • rising damp
  • moss growing on the roof
  • loose roof tiles
  • leaking gutters

What can you claim for?

If your property is hit by a storm, causing internal damage such as water ingress, you may be able to make a claim. As the damage was caused by a one-off event, it wouldn’t be considered wear and tear. To make a claim for this kind of incident, you’d need accidental damage cover.

How to reduce the impact of wear and tear

Unfortunately, the condition of a property will deteriorate over time and it’s likely that you’ll need to spend money on repairing damage to your roof or gutters.

The sooner you spot an issue, the quicker you can fix it. In most cases, the problem will be less serious and cheaper to repair the earlier you spot it.

It’s good practice to carry out regular inspections of your rental property to catch any wear and tear issues before they get worse. One of the best things you can do is inspect the outside of the property, checking for dislodged guttering or signs of water damage such as a discolouration to the brick work.

It’s also worthwhile to get a professional contractor to inspect the roof for any damage and remove any moss that could cause future damage.

Landlord insurance isn’t a legal requirement, but bear in mind that buildings insurance is a requirement of most mortgage lenders and many leasehold agreements.

It’s important to understand that a conventional home insurance policy is usually not valid if you’re renting out your property, so you’re likely to need dedicated landlord insurance.

What level of landlord insurance cover do I need?

The amount of landlords’ building insurance you take out should be based on the rebuild value of your property (the cost of rebuilding your property from scratch).

You should base the amount of landlords’ contents insurance you take out on the cost of replacing all of your contents. This includes the furniture and appliances that you provide to your tenants like the fridge, television, and sofa.

Other types of landlord insurance have set maximum cover levels. For example, Simply Business offers £2 million or £5 million of property liability cover, up to £2,500 rental income a month for tenant default insurance, and a standard cover limit of £50,000 for legal expenses.

Top tips for managing your rental property

Renting out a property can be very rewarding, but there are lots of things to think about from redecorating and property maintenance, to managing tenants, to paying tax, to complying with regulations.

Our Knowledge centre has a wealth of guides, templates, and tips to help you manage all parts of your property.

We’ve got three landlord checklists that outline everything you need to think about before, during, and after a tenancy:

Do you have any unanswered questions about landlord insurance? Let us know in the comments below.

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Conor Shilling

Written by

Conor Shilling

Conor Shilling is a professional writer with over 10 years’ experience across the property, small business, and insurance sectors. A trained journalist, Conor’s previous experience includes writing for several leading online property trade publications. Conor has worked at Simply Business as a Copywriter for three years, specialising in the buy-to-let market, landlords, and small business finance.

We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer

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