A Guide to Landlord Insurance

When you rent your property out to a tenant, you can no longer control how it’s treated. For peace of mind, it’s a good idea to cover yourself with landlord’s insurance, which can protect against loss of rent, damage to your property and any claims made against you.

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What is landlord insurance?

Landlord insurance protects you against any risks you may encounter while renting your property.

Your insurance premium is the amount you pay (monthly or annually) for this protection. Your insurer calculates the risk that the events covered by insurance will happen, and this determines how much you need to pay.

To get insured, you will need to choose an insurance policy. This is a document that lists exactly what you are and aren’t protected against.

If something happens that is covered by your insurance, you can make a claim. This means letting the insurance company know what has happened, and they will check that it’s covered by your policy. If so, they’ll pay you compensation as agreed.

Different types of landlord insurance 

What is buildings insurance?

Buildings insurance covers any damages to the actual structure of your property, as well as the cost of rebuilding the home if it’s damaged beyond repair. If your property is a flat within a block, this will usually be part of a shared block policy. Generally, you won’t be able to take out a buy-to-let mortgage if you don’t have buildings insurance.

Buildings insurance policies often cover you against the following:

  • Fire or smoke damage
  • Natural causes, eg. lightning and storms
  • Theft, vandalism or malicious damage
  • Oil or water impact caused by accidents, and burst pipes
  • Subsidence

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What is contents insurance?

Contents insurance covers the cost of repairing or replacing the contents of your property, including carpets, furniture electricals if damaged, eg. in a flood. This only covers the items you have provided in the let; your tenants will have to take out a separate policy for their own items, so your premium will depend on whether the property is furnished or unfurnished. Contents insurance can either be taken out stand alone or as an extension of buildings insurance.

What is public liability insurance?

Public liability insurance covers you if a tenant or guest is injured in your property. However, this does not mean you shouldn’t be making the property as safe as possible for tenants. These often have extremely high coverage limits in case you’re held legally responsible for an accident.

What is rent guarantee insurance?

Also known as tenant default insurance or rent receivable insurance, rent guarantee insurance protects you if your tenant is behind with rent, and even when the property is empty. This is helpful for landlords who rely on rent to cover their mortgage payments.

What is accidental damage cover?

Accidental damage insurance protects your property and its contents against incidents such as spillages or breakages, covering repair and replacement if necessary.

What is legal expense cover?

Legal expenses cover is often included in rent guarantee insurance and will cover the cost of any repossession or eviction proceedings you require.

What is alternative accommodation cover?

Alternative accommodation insurance is useful if your property is rendered uninhabitable as a result of fire, flooding, subsidence or storm damage. It will help you find and pay for alternative accommodation for your tenant so as not to leave them homeless. It is not a legal requirement unless alternative accommodation provision is stated in the tenant’s contract.

What is home emergency cover?

Home emergency cover protects you against loss of essential services in your property, for example plumbing or heating problems, roofing problems and infestations among other things. Policies cover the cost of repairs, and gives you access to a 24-hour helpline to get things up and running again quickly. Make sure you read the policy carefully before buying, as many contain significant exclusions.

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What is unoccupied insurance?

Unoccupied insurance protects your property from theft, vandalism etc even when there are no tenants living there, as standard landlord insurance policies may not cover a property that has been empty for an extended period of time.

How to find the best insurance quotes 

It’s a good idea to shop around and compare quotes for insurance to make sure you get the best deal. Price comparison websites are useful for this, but these don’t always give the full picture. It’s a good idea to think about the level of cover you need; some policies include cover for things like accidental damage and alternative accommodation, whereas others may offer them as optional cover that you need to pay extra for. If you’re unsure, it’s a good idea to hire a financial advisor.

Here at Mashroom, we offer extensive, well-priced insurance policies, including home emergency cover, content insurance and rent guarantee insurance.

What happens if I don’t get insurance?

If you want a buy-to-let mortgage, you will almost always need building insurance, and many lenders will state a minimum level of cover required. Deciding against other types of landlord insurance can also expose you to the risk of hefty bills; if you don’t have public liability insurance, for example, you may be held legally responsible if an accident takes place on your property and have to fork out a lot of money in legal fees.

Finding the right insurance is essential for all landlords, so make sure you compare prices and read any policies in full to protect your property and save money.

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Mashroom is an appointed representative of Adelphi Insurance Brokers Ltd. Adelphi Insurance Brokers Ltd is authorised and regulated by the Financial Conduct Authority (FCA). Their Financial Services Register number is 594620, with permitted business activities being introducing, advising, arranging, dealing as agent, assisting in the administration and performance of general insurance contracts and credit broking in relation to insurance instalment facilities. You may check this on the Financial Services Register by visiting the FCA’s website, register.fca.org.uk or by contacting the FCA on 0800 111 6768