Landlord insurance helps you to protect yourself, your property, and your tenants. Conventional home insurance policies aren’t designed to cover rental activities and your mortgage lender will usually ask you to take out a specialist landlord policy.
There’s no legal obligation for a landlord to take out a dedicated insurance policy. However, a conventional home insurance policy won’t cover you for rental activities, and if you have a mortgage on your property it’s very likely that your lender will require you to take out insurance before you take on tenants. It’s important to note that you’ll usually need written permission from your mortgage lender before you let your property, and that failure to get this may mean that you’re breaking the terms of your mortgage.
You can choose from a range of covers designed for landlords, including property owners’ liability insurance and contents insurance, along with buy-to-let buildings cover. You can learn more about the differences between standard homeowner insurance and landlord insurance on our landlord vs. homeowners insurance page.
See also: is landlord insurance mandatory?
A normal home insurance policy generally won’t be valid if the property is being rented out, even if you’re renting to family members.
You’ll probably need to take out a landlord insurance policy, and for your landlord insurance to be valid you’ll normally need to put a tenancy agreement in place. Also bear in mind that you need to seek approval from your mortgage lender.
If you decide that you don’t need covers like tenant default insurance and legal expenses insurance because you’re renting to family members, you can choose to buy a landlord policy that just includes core covers like buildings insurance and property owners’ liability insurance.
If you rent out part of your property then a normal home buildings and contents insurance policy is unlikely to be valid, even if you also live in the property.
Instead, you will usually need a specialist landlord insurance policy, and when you buy it you need to tell the provider that you also live in the house.
You will need to have a tenancy agreement in place in order for your landlord insurance policy to be valid. Under the tenancy agreement, the tenant is usually granted exclusive use of at least one room, and you can’t enter without their permission.
Remember that you’ll need to tell your mortgage lender that you’re renting out part of your property, as otherwise you may be breaching the terms of your mortgage.
Check out the government’s guide to renting rooms in your home for more information about being a resident landlord.
If you’re renting out your property then you need to check with your provider that your home buildings insurance will still be valid. Usually, you need to take out a specific landlord insurance policy, which can include buildings insurance, landlords’ contents insurance and property owners’ liability insurance.
If it’s possible to amend your existing buildings insurance to cover your rental activities then you may still choose to take out a separate landlord insurance policy to provide rental-related cover like property owners’ liability, tenant default and legal expenses insurance. These covers aren’t required by law, but you should check if they are required by your mortgage lender.
You can buy building insurance as part of your landlord insurance policy. Landlord insurance from Simply Business can include property owners’ liability insurance, building insurance, landlords’ contents insurance and other rental-related covers.
Bear in mind that a normal residential building insurance policy will usually be invalid if you rent out your property, so cover specifically designed for landlords is usually necessary. Also remember that building insurance tends to be a requirement of mortgage lenders.
If you rent out a room in a property you also live in - for example, you have lodgers - then it’s likely your normal home insurance won’t be valid. Most home insurance policies state that only the policyholder and their immediate family should be living in the property.
You can contact your insurer to see if they can amend your policy to reflect the fact that you’ve got a lodger, or you may need to buy specialist landlord insurance.
If you buy landlord insurance, a requirement of your policy is likely to be that you have a tenancy agreement in place with your lodger. The tenancy agreement will usually grant your lodger exclusive use of at least one room, and you won’t be allowed to enter this room without their permission.
If you rent out rooms in a property to three or more people from different households, this is considered a house in multiple occupation (HMO). Speak to your local council about getting an HMO licence. Normal home buildings and contents insurance isn’t valid for HMOs, so you’ll need to get a landlord insurance policy to cover your property.
If you’re renting out a flat, you’re basically in the same boat as those renting out a house: you’ll usually need landlord insurance rather than normal residential home insurance to cover your property.
If there’s a freeholder, they may organise the buildings insurance for the whole building, but if this is the case then you’ll need to tell them you’re renting your part of the property so that they can update the policy. You may still decide to take out a separate landlord insurance policy that includes other insurance like property owners’ liability cover and landlords’ contents insurance.
If you’re responsible for organising the buildings insurance then make sure you get a policy that covers your rental activities. Remember that adequate buildings insurance is likely to be required by the terms of your mortgage.
It’s up to you to decide which types of landlord insurance to buy for your flat, but you should check which covers are required by your mortgage lender and whether your leasehold agreement specifies particular cover. Usually, you’ll at least be required to have adequate buildings insurance.
If there’s a freeholder, they may organise the buildings insurance for the whole building. In this case, you should tell the freeholder that your flat is rented to make sure the cover is appropriate, and then you may still choose to take out other landlord insurance like property owners’ liability cover and landlords’ contents insurance.
All of the landlord insurance covers offered by Simply Business are relevant to flats as well as houses. For example, alongside buildings insurance and property owners’ liability insurance, you may decide to take out legal expenses cover in case you need to take legal action against your tenants, and accidental damage cover to pay in the case of damage to your property.
Landlord insurance is a type of homeowner insurance that’s designed for rental properties, so you shouldn’t need to have landlord insurance and separate homeowner insurance.
Your landlord insurance policy can cover your buildings and contents in case of damage by something like fire or flood. Landlord insurance can also cover rental-specific risks, for example property owners’ liability cover can protect you if a tenant or visitor sues you, and tenant default insurance can cover you if your tenant fails to pay rent. You can therefore build a comprehensive policy that covers the range of risks associated with your rental property.