What type of landlord insurance do I need?
The specific type of landlord insurance you need depends on what you want the policy to cover. The most common types of landlord insurance are:
- Buildings cover
- Contents cover
- Fixtures and fittings cover
- Rental protection
Buildings cover protects the structure of your property against damage from fire, flood, storms and subsidence. It should also cover outbuildings and sheds, if you have them.
Contents cover protects all furniture and possessions that belong to you. If you're renting out a furnished or part-furnished property, this could come in handy. If your property is unfurnished, it's unlikely you need this kind of cover. Your tenants should arrange cover for their own possessions.
Fixtures and fittings cover should come as part of a landlord buildings insurance policy. This protects your kitchen and bathroom fittings from theft and damage. Generally, any fixtures you wouldn't take with you when moving home should be covered under a buildings insurance policy.
Rental protection could be vital when dealing with tenants. Also known as rent guarantee insurance, this policy lets you claim back lost rent if your tenant doesn't pay. There are usually time limits and exclusions, so it's worth checking the policy details.
Which landlord insurance optional extras do I need?
You can choose from a selection of extras to add onto your policy, including:
- Rent guarantee insurance
- Legal cover
- Vacant periods with no tenants
- Accidental damage by tenants
- Home emergency cover
- Cost of repairing damage
- Compensation claims due to tenant injury
- Property owner’s liability cover.
- Rent guarantee insurance, also known as tenant default insurance or loss of rent. This covers you if your tenants can’t pay their rent - usually for a set period of time
- Legal cover pays for your legal costs if you have to go to court, up to a limit
- Vacant periods with no tenants: covers the property even if it’s unoccupied
- Accidental damage by tenants covers you if the bath overflows or the oven is left on, for example
- Home emergency cover includes burst pipes and electrical failure. You can also get access to a 24/7 helpline. Home emergency also covers your boiler and central heating breakdowns
- Cost of repairing damage such as a gas leak or pest infestation. These fall into home emergencies, which are included with this
- Compensation claims due to tenant injury. If a tenant gets injured because of your property, your insurer should cover any payout up to a certain limit
- Property owner’s liability cover. If a tenant or a third party gets injured on your property, or there’s damage to their possessions, your insurer should handle any compensation claims
How much does landlord insurance cost?
The cost of landlord insurance depends on how likely you are to make a claim on the policy. The higher your risk, the higher your costs are.
The average cost of landlord insurance depends on a lot of factors. Some of these are within your control and some are in the hands of your insurance provider. For example, safety regulations for landlords are something that must be upheld.
Your landlord insurance costs could be impacted by:
- The size and value of the property
- The location
- The type of tenants you have
- Your claims history
The size and value of the property influences your insurance costs as more expensive properties mean more expensive claims. Also, a large, 6-bedroom house has an increased risk of something going wrong than a 2-bed flat.
Location can determine certain risks. A house in the city could be more at risk of burglary than one in the suburbs, for example. And houses built on certain types of ground could be more at risk of subsidence or flooding.
The type of tenants you have could be important too. Letting a property out to a group of students, for example, comes with a different set of risks than with a young family or a professional couple.
How you pay for your policy could impact your price. Usually, paying for your landlord insurance in one go tends to be cheaper than a monthly direct debit.
Your claims history influences the risk of you making a future claim based on claims you've already made. This in turn could increase your prices.
How can I reduce the cost of my landlord insurance?
If you want to find a cheap landlord insurance policy the key is comparing prices and insurers. You also want to make sure the policy you choose gives you the right amount of cover and is not just the cheapest option.
There are some things you can do to lower the cost. These include:
- Keep your property in a good condition
- Avoid small claims
- Upgrade your home security
- Review your level of cover
- Keep the property occupied
- Pay a higher excess
- Pay annually
- Keep your property in a good condition and well maintained. The better the standard of the property, the lower the risk of making a claim and the cheaper your insurance should be.
- Avoid small claims, if possible. The fewer claims you’ve made in the past, the cheaper your insurance is likely to be. This doesn’t mean you should avoid making a claim, but if it's a small job you can fix without your insurer it may be worth considering.
- Home security can help lower the cost of your insurance. The more security measures, like alarms, the better.
- The level of cover also affects the price. A fully comprehensive policy with all the add-ons, is likely going to be more expensive. Make sure you’re only paying for the cover you need.
- Keep the property occupied, if you can. Leaving the property unoccupied can push the price up.
- Pay a higher excess to reduce the price of your insurance. But always make sure you can afford to pay the excess if you need to.
- Pay annually. Paying monthly is often more expensive as it can include an interest rate.
What our home insurance expert says
Take your time considering any additional extras you might want to add to your policy. Things like accidental damage, home emergency, legal cover and loss of rent aren’t covered as standard in most policies, but you can add them when you get a landlord insurance quote.
Home insurance product manager
Need more help?
Tenants who don’t pay their rent, don’t treat your property with care or who hold all-night long parties upsetting all the neighbours can happen, but it is rare. This is where your insurance can help by covering the cost of damage, unpaid rent, and even legal fees if you need to go to court.
To make a claim you will usually need to contact your insurer on the phone, although sometimes this can be done online or you can start the process this way. You’ll need to give your policy number along with details of the reason for the claim. Give as much detail as you can, and keep hold of receipts if you have had to pay for work, or communications between you and your tenants.
You can usually add properties onto your insurance or buy landlord insurance for multiple properties. The more you have, the more the cost will be, and that’s why you need to shop around to find the best policy for your needs.
When you purchase your landlord insurance there will usually be an optional extra for 'loss of rent' cover. This protects you if for any reason your tenants can't pay their rent usually for a set period of time. Or it may be until the tenant has been replaced, if this has to happen. Check the small print when you sign up to find out where you stand.
Yes. It’s a business expense and therefore it is tax deductible. When you fill in your self-assessment tax return you can add it onto the section for tax-deductible expenses.
A standard home insurance policy will cover your property but it is unlikely to offer protection in relation to your tenants. This includes missing rent, accidental damage, or tenants who are just careless and aren’t looking after the place well. If you have a standard policy, you may not be able to make a claim if it is in relation to paying tenants. The property also is unlikely to be covered for long periods when it’s empty.
You don’t need contents insurance, it’s an optional extra. If you have it, it will cover anything you own which is in the property. If it’s completely unfurnished, you may not need it.
This depends on a technicality. If you have a tenant who pays you, and they have their own area of the home which you don’t go into, then you should take out a landlord insurance policy if you want to be covered for things in relation to them. If you have a lodger, and you are allowed into the area of the home they live in, you can usually add them onto an existing home insurance policy. Either way, check with the insurer first to find out what the best option is for your circumstances.
Boiler cover is usually either a standalone insurance policy for your boiler, or you can add this to an existing policy. There are lots of options. You can get cover for just your boiler, the boiler and central heating, or both of these and any home emergencies, although the cost rises the more protection you add.
None of these policies are a legal requirement, and you could just use your standard home insurance and pay for any repairs it doesn’t cover.
Landlord insurance isn't a legal requirement. But many mortgage providers insist on you having at least buildings cover as a condition before you can get the mortgage.
And savvy tenants are likely to insist on you having some kind of cover in place to protect them when they move in.
Ultimately, it provides peace of mind that, should your property suffer damage or loss, you're not left severely out of pocket.