WHAT IS INSURANCE FOR LANDLORDS?
Tom Condon
April 23rd 2023
Share this post
Start your property portfolio today!
Insurance for landlords covers property owners against risks related to their buy-to-let property, investment portfolio and rental activity. The insurance policies are designed to protect property owners who own tenancy properties.
Want to know more? This article will cover what insurance for landlords is, what it covers, how much it costs and why you need it.
Insurance for landlords protects the property owner from financial losses connected with the rental, such as fire, theft or water damage. Landlord insurance can be extended to include coverage for things like unpaid rent and tenant damage.
The insurance usually covers buildings and contents insurance.
Is Landlord Insurance A Legal Requirement?
Insurance for landlords is not mandatory, but if you have tenants, a standard home insurance policy won’t cover you if there are any serious issues.
Do You Need Landlords Insurance For A Mortgage?
If you want to take a mortgage out on a property, the mortgage lender may ask you to take out the landlord’s insurance.
Most landlords will want some insurance policies, but some will be obliged to have one as part of their buy-to-let mortgage contract conditions.
Other than trying to attain a buy-to-let mortgage, another issue landlords will face is when their tenant cannot pay their rent, which is not covered by a standard landlord insurance policy. This is problematic as they will meet long eviction times and no incoming rent.
This is why when looking for landlord insurance policies, you should ensure that the provider includes some form of Rental Income Protection or Tenant Default Insurance.
What Types Of Property Are Eligible For Landlord Insurance?
The type of property eligible for landlord insurance will depend on the landlord insurance policy and provider you choose. But most property types will qualify for landlords insurance, including:
- Terraced & end terrace houses.
- Semi-detached & detached houses.
- Bungalows.
- Maisonettes & Duplexes.
- Individual flats in Multi-Unit Freehold Blocks or blocks of flats.
- Individual flats in converted buildings or houses.
- Entire purpose-built buildings with multiple flats.
- Entire converted buildings or houses with multiple flats.
There is no legal requirement to get insured on your property, but many mortgage terms will require you to get specific insurance policies. Even if you are applying for a mortgage for a property you wish to live in, you will need Buildings Insurance, Life Insurance, Critical Illness Cover and Income Protection.
Property owners looking to run the rented property must get a specialist landlord insurance policy to ensure their mortgage provider has peace of mind.
Landlord insurance cover will vary depending on the provider, but most landlord policies include buildings and content insurance, accidental damage cover and rent protection.
Some Landlord Insurance Cover providers will only service Buildings and Content Insurance, with property owner’s liability, loss of rent and tenant default insurance cover as additional packages. Here are the different types of Insurance for Landlords:
Landlord Building Insurance
Landlord Building Insurance covers damage to your property caused by incidents like fire, lightning, explosions, malicious damage and escape of water. It applies to your property and could include frozen pipe thawing and bursting.
Landlord’s Contents Insurance
Landlord’s Contents Insurance covers any damage to your contents caused by fire, lightning, explosions, malicious damage and escape of water. The contents cover applies to things like appliances, furniture and household goods.
Accidental Damage Insurance
Accidental Damage Insurance covers claims against your business for unexpected physical damage to your property or contents caused by your tenants or visitors.
This could include tenants having a gathering, someone spilling red wine on the carpet, or a child throwing a toy at a light fitting.
Tenant Default Insurance
Tenant Default Insurance covers up to £5,000 rental indemnity across a 12-month rental payment period, especially if you have to evict your tenants for not paying rent.
Property Owners’ Liability Insurance
Property Owners’ Liability Insurance covers any legal liability for injuries, accidental loss or damage as the property owner.
This could include the property tenant falling over a loosely fitted carpet into a table and breaking their arm.
Landlord Home Emergency Cover
Landlord Home Emergency Cover covers any plumbing, drainage or electrical emergencies, including boiler repairs and replacements up to £500.
You will need additional Cover for your annual boiler servicing.
Landlord Legal Expenses Insurance
Landlord Legal Expenses Insurance covers any legal costs or solicitors fees you occur as the property’s landlord, which includes:
- Repossession – any legal costs which occurred in the process of regaining possession of the property.
- Property Damage – any legal costs if damage to your property is over £1,000.
- Tenant Eviction – any legal costs of evicting tenants.
- Rent Recovery – Any legal costs when recovering rent you are owed if it’s late by one calendar month.
- Tax Protection & Contractual Disputes – Any legal costs associated with solicitors representing and negotiating for you, complete enquiries into your personal tax affairs, or contractual disputes over goods and services.
While being a landlord, you will almost certainly need a solicitor, which is why getting legal expenses covered is vital, as otherwise, it could become extremely costly, especially when you can’t claim the costs back.
Commercial Landlords’ Contents Insurance
Commercial Landlords’ Contents Insurance covers damage to the property owner’s contents caused by fire, lightning, explosions, escape of water or malicious damage. The contents could include appliances, furniture and equipment you’ve supplied to your tenant.
You will need additional Cover if your tenant has caused accidental damage.
Commercial Landlords’ Improvements Insurance
Commercial Landlords’ Improvements Insurance covers any changes you, as the property owner, make to the property’s structure, like partitions or wooden flooring.
This could include if there are any flood or fire damages to wooden flooring you have recently installed and you need to replace or repair it.
Rental Income Protection Insurance
Rental income protection insurance covers any damage to the property which prevents your tenants from trading and being able to pay the rent.
Usually, this applies to commercial property, where the property becomes uninhabitable due to damage to the structure or appliances. This could include; fire or water damage preventing the tenant from trading or functioning their business and, therefore, being unable to pay rent
Insurance for landlords will vary depending on the type of property, rebuild costs, age of the property, as well as:
- If the property is unoccupied or occupied.
- Construction materials.
- Type of occupancy (residential, commercial or mixed).
- The number of properties covered.
- Add on coverages (accidental damage, Cover for fixtures and fittings, tenant default, rental protection, home emergency cover).
- If there are any building or home renovation works in progress.
According to NimbleFins, the average cost of landlord insurance starts at £170 for a no-frills building and only covers a UK property with a £200,000 rebuild cost.
The type of property will impact the insurance cost for landlords, with semi-detached properties costing the least to insure at £150 and individual flats in converted buildings costing the most at £200.
Unsurprisingly, properties that cost more to rebuild or cost more to insure as insurance companies face more significant losses in case of the event of a claim. Landlord insurance quotes varied from £137 for a £150,000 rebuild cost up to £420 for a £1,000,000 rebuild cost.
Older properties also cost more to insure due to the higher risk of damage as the properties need to be built to modern safety standards. A property built before 1850 may cost £167, while a property built in the last 20 years may cost £141 to insure.
In terms of extra Cover, it will again vary on the factors above as to how much they will cost, but here are some general quotes:
- Accidental Damage (Building Only) – £299.
- Legal Expenses (£50,000 of Cover) – £40.
- Tenant Default/Rent Guarantee (£12,000 to £50,000 of Total Cover – £46+ to £100+.
- Home Emergency (Boiler, Heating, Electric). – £144.
- Landlord’s Contents (£5,000 of Cover) – £290.
- Landlord’s Contents (£10,000 of Cover) – £303.
- Landlord’s Contents (£20,000 of Cover) – £221.
You should ensure that you have Property Owners’ Liability Insurance in place in case one of your tenants has injured themselves due to a fault in the rental property and has made a claim.
What Checks Do You Need To Carry Out?
Before you get a quote from Insurers, you must carry out background and identity checks, independent references and credit checks on any prospective tenants or their guarantors before granting them tenancy within your property.
How Do You Save Money On Insurance For Landlords?
When searching for insurance for landlords, you should ensure you receive quotes from a broker or comparison engine, as this will save you time and money.
Prices vary depending on the insurance vendor, so you must find multiple quotes to make the best-balanced decision possible. Here are some other ways to save money on landlord insurance:
- Compare the market and do your research before accepting a quote.
- To avoid monthly interest charges, pay annually, not monthly.
- You can find discounts if you get all your coverage from one vendor.
- Only get the optional extras if you need them.
- To help avoid issues that could lead to a claim, you should keep your property well maintained as this will prevent increasing your insurance premium.
- Ensure any furnishings in the property are regulated and safe.
If you’re a landlord, you must sort out landlord insurance to ensure you have coverage to protect your property and finances. There is absolutely no legal requirement to get insurance for landlords.
However, Landlord insurance covers you against unpredictable events, like malicious damage, fire or floods. It may even allow you liability coverage and buildings insurance policies.
Residential properties are constantly being used and need much maintenance; occasionally, if the property is maintained partially, then problems can arise. You must protect your property and yourself from having a claim against you.
Public Liability Insurance is not mandatory or a legal requirement, but if any claims against you go to court and you lose, the lawful expense involved can be costly, which is why protection is always better than no protection.
Landlord insurance is far more expensive than home insurance because of one thing — risk. Tenants tend to take less care when living within a rented property, which can affect accidental damage coverage.
Although building insurance is covered within Landlord insurance, Landlord insurance is more of an overreaching package with multiple different insurance policies within. You must find a specialist landlord insurer to provide the correct Cover.
You can get a landlord insurance policy applicable across your portfolio, but each building will have policies that can be paid via one account.
Start your property portfolio today!
Insurance for landlords covers property owners against risks related to their buy-to-let property, investment portfolio and rental activity. The insurance policies are designed to protect property owners who own tenancy properties.
Want to know more? This article will cover what insurance for landlords is, what it covers, how much it costs and why you need it.
Insurance for landlords protects the property owner from financial losses connected with the rental, such as fire, theft or water damage. Landlord insurance can be extended to include coverage for things like unpaid rent and tenant damage.
The insurance usually covers buildings and contents insurance.
Is Landlord Insurance A Legal Requirement?
Insurance for landlords is not mandatory, but if you have tenants, a standard home insurance policy won’t cover you if there are any serious issues.
Do You Need Landlords Insurance For A Mortgage?
If you want to take a mortgage out on a property, the mortgage lender may ask you to take out the landlord’s insurance.
Most landlords will want some insurance policies, but some will be obliged to have one as part of their buy-to-let mortgage contract conditions.
Other than trying to attain a buy-to-let mortgage, another issue landlords will face is when their tenant cannot pay their rent, which is not covered by a standard landlord insurance policy. This is problematic as they will meet long eviction times and no incoming rent.
This is why when looking for landlord insurance policies, you should ensure that the provider includes some form of Rental Income Protection or Tenant Default Insurance.
What Types Of Property Are Eligible For Landlord Insurance?
The type of property eligible for landlord insurance will depend on the landlord insurance policy and provider you choose. But most property types will qualify for landlords insurance, including:
- Terraced & end terrace houses.
- Semi-detached & detached houses.
- Bungalows.
- Maisonettes & Duplexes.
- Individual flats in Multi-Unit Freehold Blocks or blocks of flats.
- Individual flats in converted buildings or houses.
- Entire purpose-built buildings with multiple flats.
- Entire converted buildings or houses with multiple flats.
There is no legal requirement to get insured on your property, but many mortgage terms will require you to get specific insurance policies. Even if you are applying for a mortgage for a property you wish to live in, you will need Buildings Insurance, Life Insurance, Critical Illness Cover and Income Protection.
Property owners looking to run the rented property must get a specialist landlord insurance policy to ensure their mortgage provider has peace of mind.
Landlord insurance cover will vary depending on the provider, but most landlord policies include buildings and content insurance, accidental damage cover and rent protection.
Some Landlord Insurance Cover providers will only service Buildings and Content Insurance, with property owner’s liability, loss of rent and tenant default insurance cover as additional packages. Here are the different types of Insurance for Landlords:
Landlord Building Insurance
Landlord Building Insurance covers damage to your property caused by incidents like fire, lightning, explosions, malicious damage and escape of water. It applies to your property and could include frozen pipe thawing and bursting.
Landlord’s Contents Insurance
Landlord’s Contents Insurance covers any damage to your contents caused by fire, lightning, explosions, malicious damage and escape of water. The contents cover applies to things like appliances, furniture and household goods.
Accidental Damage Insurance
Accidental Damage Insurance covers claims against your business for unexpected physical damage to your property or contents caused by your tenants or visitors.
This could include tenants having a gathering, someone spilling red wine on the carpet, or a child throwing a toy at a light fitting.
Tenant Default Insurance
Tenant Default Insurance covers up to £5,000 rental indemnity across a 12-month rental payment period, especially if you have to evict your tenants for not paying rent.
Property Owners’ Liability Insurance
Property Owners’ Liability Insurance covers any legal liability for injuries, accidental loss or damage as the property owner.
This could include the property tenant falling over a loosely fitted carpet into a table and breaking their arm.
Landlord Home Emergency Cover
Landlord Home Emergency Cover covers any plumbing, drainage or electrical emergencies, including boiler repairs and replacements up to £500.
You will need additional Cover for your annual boiler servicing.
Landlord Legal Expenses Insurance
Landlord Legal Expenses Insurance covers any legal costs or solicitors fees you occur as the property’s landlord, which includes:
- Repossession – any legal costs which occurred in the process of regaining possession of the property.
- Property Damage – any legal costs if damage to your property is over £1,000.
- Tenant Eviction – any legal costs of evicting tenants.
- Rent Recovery – Any legal costs when recovering rent you are owed if it’s late by one calendar month.
- Tax Protection & Contractual Disputes – Any legal costs associated with solicitors representing and negotiating for you, complete enquiries into your personal tax affairs, or contractual disputes over goods and services.
While being a landlord, you will almost certainly need a solicitor, which is why getting legal expenses covered is vital, as otherwise, it could become extremely costly, especially when you can’t claim the costs back.
Commercial Landlords’ Contents Insurance
Commercial Landlords’ Contents Insurance covers damage to the property owner’s contents caused by fire, lightning, explosions, escape of water or malicious damage. The contents could include appliances, furniture and equipment you’ve supplied to your tenant.
You will need additional Cover if your tenant has caused accidental damage.
Commercial Landlords’ Improvements Insurance
Commercial Landlords’ Improvements Insurance covers any changes you, as the property owner, make to the property’s structure, like partitions or wooden flooring.
This could include if there are any flood or fire damages to wooden flooring you have recently installed and you need to replace or repair it.
Rental Income Protection Insurance
Rental income protection insurance covers any damage to the property which prevents your tenants from trading and being able to pay the rent.
Usually, this applies to commercial property, where the property becomes uninhabitable due to damage to the structure or appliances. This could include; fire or water damage preventing the tenant from trading or functioning their business and, therefore, being unable to pay rent
Insurance for landlords will vary depending on the type of property, rebuild costs, age of the property, as well as:
- If the property is unoccupied or occupied.
- Construction materials.
- Type of occupancy (residential, commercial or mixed).
- The number of properties covered.
- Add on coverages (accidental damage, Cover for fixtures and fittings, tenant default, rental protection, home emergency cover).
- If there are any building or home renovation works in progress.
According to NimbleFins, the average cost of landlord insurance starts at £170 for a no-frills building and only covers a UK property with a £200,000 rebuild cost.
The type of property will impact the insurance cost for landlords, with semi-detached properties costing the least to insure at £150 and individual flats in converted buildings costing the most at £200.
Unsurprisingly, properties that cost more to rebuild or cost more to insure as insurance companies face more significant losses in case of the event of a claim. Landlord insurance quotes varied from £137 for a £150,000 rebuild cost up to £420 for a £1,000,000 rebuild cost.
Older properties also cost more to insure due to the higher risk of damage as the properties need to be built to modern safety standards. A property built before 1850 may cost £167, while a property built in the last 20 years may cost £141 to insure.
In terms of extra Cover, it will again vary on the factors above as to how much they will cost, but here are some general quotes:
- Accidental Damage (Building Only) – £299.
- Legal Expenses (£50,000 of Cover) – £40.
- Tenant Default/Rent Guarantee (£12,000 to £50,000 of Total Cover – £46+ to £100+.
- Home Emergency (Boiler, Heating, Electric). – £144.
- Landlord’s Contents (£5,000 of Cover) – £290.
- Landlord’s Contents (£10,000 of Cover) – £303.
- Landlord’s Contents (£20,000 of Cover) – £221.
You should ensure that you have Property Owners’ Liability Insurance in place in case one of your tenants has injured themselves due to a fault in the rental property and has made a claim.
What Checks Do You Need To Carry Out?
Before you get a quote from Insurers, you must carry out background and identity checks, independent references and credit checks on any prospective tenants or their guarantors before granting them tenancy within your property.
How Do You Save Money On Insurance For Landlords?
When searching for insurance for landlords, you should ensure you receive quotes from a broker or comparison engine, as this will save you time and money.
Prices vary depending on the insurance vendor, so you must find multiple quotes to make the best-balanced decision possible. Here are some other ways to save money on landlord insurance:
- Compare the market and do your research before accepting a quote.
- To avoid monthly interest charges, pay annually, not monthly.
- You can find discounts if you get all your coverage from one vendor.
- Only get the optional extras if you need them.
- To help avoid issues that could lead to a claim, you should keep your property well maintained as this will prevent increasing your insurance premium.
- Ensure any furnishings in the property are regulated and safe.
If you’re a landlord, you must sort out landlord insurance to ensure you have coverage to protect your property and finances. There is absolutely no legal requirement to get insurance for landlords.
However, Landlord insurance covers you against unpredictable events, like malicious damage, fire or floods. It may even allow you liability coverage and buildings insurance policies.
Residential properties are constantly being used and need much maintenance; occasionally, if the property is maintained partially, then problems can arise. You must protect your property and yourself from having a claim against you.
Public Liability Insurance is not mandatory or a legal requirement, but if any claims against you go to court and you lose, the lawful expense involved can be costly, which is why protection is always better than no protection.
Landlord insurance is far more expensive than home insurance because of one thing — risk. Tenants tend to take less care when living within a rented property, which can affect accidental damage coverage.
Although building insurance is covered within Landlord insurance, Landlord insurance is more of an overreaching package with multiple different insurance policies within. You must find a specialist landlord insurer to provide the correct Cover.
You can get a landlord insurance policy applicable across your portfolio, but each building will have policies that can be paid via one account.
Large discounts on property
Completely transparent
Tailored investment opportunities
We’ll handle everything for you
Looking for hassle free property?
We’ve got you! Whatever your motivations as a landlord or property owner are, we can help source and match property with you.
When the foundations of your company are built upon industry knowledge and experience, you can’t help but be a self-confident company.
Here at The Property Sourcing Company, we are led by a roster of industry experts who have over 50 years of combined experience in doing BMV property deals, as well as packaging them up for investors.
Quality sits at the heart of our team, who go the extra mile to tailor our service to you. We pride ourselves in our ability to source you a wide variety of high-yield property investments.
Get in touch and we’ll establish what type of property you’re searching for, before talking you through our current investment opportunities. We’ll also keep you posted as we acquire new deals.
When you buy your investment property through us and we’ll take care of solicitors, surveys – everything – all to ensure you have a stress-free property purchase. It’s just one of the ways we make investment work for you.
Why invest with us?
Simply put, we’ll get you the best possible deal. Our sister company, The Property Buying Company, have been in the property buying industry for years & we have access to all their stock which is at a price point that is ready for investors to buy and make a great return on.
No middlemen, no stress & no hassle. We make investing in property and growing your portfolio as easy as it possibly can be.
