Becoming a landlord can be a smart financial decision, but it also comes with its own unique set of risks. Whether you’re renting out a single flat or managing a portfolio of properties, it is crucial to ensure you have the right protection in place. From problematic tenants to unexpected property damage, there’s always uncertainty when managing a rental property. That’s where landlord insurance comes in.
What is landlord insurance?
Landlord insurance is a specialised type of cover designed for property owners who rent out their property to tenants. Unlike standard home insurance, which is tailored to owner-occupiers, landlord insurance is built to reflect the additional risks involved in letting out a property—such as tenant-related damage or loss of rental income.
It’s not a legal requirement in the UK, but most mortgage lenders will require it if you’re letting out a mortgaged property. And even if they don’t, it’s a smart and proactive step to protect your investment.
What does it typically cover?
Policies can vary, but a comprehensive landlord insurance policy typically includes:
- Buildings insurance – Covers the structure of the property against risks like fire, flood, storm damage, or vandalism
- Contents insurance – If you’re letting out a furnished property, this covers your items such as furniture, carpets, and appliances (not the tenant’s belongings)
- Loss of rent – If your property becomes uninhabitable due to an insured event (like a fire or flood), you may be covered for the rental income you lose during repairs
- Property owners’ liability – Offers protection if a tenant or visitor is injured on your property and holds you legally responsible
- Accidental damage – Covers unforeseen mishaps, such as a spilled drinks on upholstery, broken windows or mirrors, cracked tiles or basins, holes in walls or doors or damaged appliances
- Legal expenses – Helps with costs if you need to take legal action to recover rent arrears or evict tenants
- Tenant default cover – Optional add-on to protect against tenants failing to pay their rent
Why you shouldn’t rely on standard home insurance
Standard home insurance is designed for owner-occupied homes, and most policies will become invalid if the property is being rented out. This means if something goes wrong—whether it’s a burst pipe or fire—you could be left footing the bill if your insurer finds out the property was let without the correct cover.
Landlord insurance, on the other hand, is specifically underwritten with rental risks in mind. It takes into account things like different occupancy types, longer vacancy periods, and the potential for tenant-caused damage.
What are the benefits of landlord insurance?
Having landlord insurance isn’t just about ticking a box for your mortgage provider—it’s about giving you real, practical support when things don’t go to plan. Here are some of the key benefits you can expect from a comprehensive policy:
- You’ll receive 100% of the monthly rent until vacant possession, with no cap on the number of months covered
- Up to £100,000 legal expenses cover, including appeals and legal representation
- Rent recovery ensuring you aren’t left out of pocket due to non-payment
- Property damage cover for civil dispute expenses when damages exceed £1,000
- 90% of rent after vacant possession for up to six weeks, helping to bridge the gap while re-letting
- Eviction of squatters, with assistance covering associated legal costs
- Contract dispute protection, covering legal costs in disputes over £100
- 90-day claim window, giving you time from the first missed rent payment to start your claim
- Auto-renewal process, so your coverage continues seamlessly, year after year
- Peace of mind, knowing you’re protected financially and legally, no matter what tenant-related issues arise
There are always extra ways to protect yourself as well as your property. If you keep on top of regular inspections (with the correct amount of notice), as well as keeping the property maintained and up the code, you should be able to avoid extra costs where needed. You should also have a clear and detailed tenancy agreement with your tenants which discusses the responsibilities of property management and upkeep, what constitutes tenant caused damage, as well as what your insurance entitles you to as the owner of the property.
Landlord insurance is a crucial step in protecting both your property and your finances, giving you peace of mind while managing your rental. With the right coverage, you can safeguard your investment and avoid costly surprises. If you’re unsure about the best options for your property, or if you’d like to learn more about how landlord insurance can benefit you, don’t hesitate to reach out. Contact us today to get expert advice and ensure you’re fully covered!
