Do I need landlord insurance?

There are some important differences between ordinary home insurance and the cover you need if you plan to rent out your house or flat. We look at what landlord insurance can cover and when you might need it.

There are some important differences between ordinary home insurance and the cover you need if you plan to rent out your house or flat. We look at what landlord insurance can cover and when you might need it.

Chris King
Home insurance expert
3
minute read
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Posted 9 MAY 2022

Is landlord insurance a legal requirement? 

Landlord insurance, sometimes called buy-to-let insurance, isn’t a legal requirement, but it’s a good idea to have it if you’re renting out a property. That’s because standard home insurance won’t cover you for some of the risks involved in letting your property to tenants.

Having landlord insurance could also be a condition of your buy to let mortgage.

If you have standard home insurance and you’re thinking of renting out your property, you’ll need to let your insurance provider know. If you don’t, you could invalidate your policy.

When do I need landlord insurance? 

You’ll need landlord insurance if you own a house or flat that you’re renting to someone else. You may also need it if you rent out a self-contained part of the property you live in.

What types of landlord insurance are there? 

Landlord buildings insurance 

You’ll need buildings insurance if you own the building you’re renting out. It covers you if the structure of the building, or its fixtures and fittings, are damaged or destroyed by: 

  • Fire
  • Flood
  • Storm
  • Vandalism 

If the property you’re renting out is in a block of flats and you’re a leaseholder, the freeholder should have buildings insurance, but check that this is the case and that you have all the cover you need. You’ll also need to check your lease for any restrictions on letting your property.

Landlord contents insurance 

If you let your property furnished or part-furnished you may want to get contents insurance that covers white goods, carpets, curtains and electrical equipment, in case they’re damaged or stolen. 

Landlord liability insurance 

If one of your tenants or a visitor is injured because of something in your property – they trip over an electrical cable, for example – this type of insurance could cover you for any legal costs and compensation.

Is my tenant’s property covered by landlord insurance? 

No. Anything that belongs to your tenant falls outside the scope of your landlord insurance. If they want to protect their property, they’ll need to take out their own contents insurance.

Do I need landlord insurance if I’m living in the property? 

If you’re renting out a single room in your house to a lodger, you won’t need landlord insurance. But you’ll need to tell your home insurance provider that you have a lodger. They may add extra cover and/or extra exclusions to your policy and your premium may go up.

Do I need landlord insurance if my tenant is a member of my family? 

Yes. Even if you’re letting to a family member your liability is the same as if your tenant was a stranger. But you may decide you don’t need extras such as rent guarantee insurance or legal expenses cover.

What extra landlord insurance might I need? 

  • Landlord emergency cover – as a landlord, it’s up to you to make sure any repairs needed to your property are carried out promptly. Landlord home emergency can cover the costs of call-outs and repairs in an emergency, such as a broken boiler or a leaking roof.
  • Tenant default or rent guarantee insurance – can make sure you’re not out of pocket if your tenant can’t, or doesn’t, pay their rent.
  • Unoccupied property insurance for landlords – can protect you when you’re between tenants.

I’m renting out several properties. Can I save on landlord insurance? 

If you own more than two properties, multi-property or portfolio landlord insurance could be cheaper. But be careful if you’re renting out different types of properties, as one higher-risk property may affect the overall cost of your insurance. We don’t compare multi-property policies, but you can contact insurance providers directly if this is what you’re interested in.

What affects the price of landlord insurance? 

There are several factors that might affect the price you pay for your premium. These include: 

  • Tenant type – tenants in shared houses or those on benefits may be considered a higher risk
  • Location – properties in areas with a high crime rate or an increased risk of flooding will typically cost more to insure
  • Type of building – whether your property is listed or in a conservation area
  • Age of the building
  • Any previous claims. 

Be aware that while allowing pets may help you attract tenants, many landlord insurance policies won’t pay out for damage caused by them.

How can I keep landlord insurance premiums down? 

You could pay less for your landlord insurance if you: 

  • Only choose the cover you need – if you’re letting unfurnished, for example, you may not need contents insurance
  • Improve security with locks and alarms
  • Increase your excess – agreeing to pay a higher amount towards any claim will reduce your premium, but you need to make sure you’ll be able to afford it if you do need to claim
  • Reduce unoccupied periods, if possible
  • Make sure your rebuild value is accurate
  • Pay annually if you can, that way you won’t have to pay interest on monthly payments.

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