Landlord insurance, sometimes called rental property insurance or buy-to-let insurance, is a specialised form of property insurance designed for individuals or entities that own residential properties rented to tenants. Unlike standard homeowners insurance, landlord policies address the unique risks associated with rental properties, including loss of rental income, tenant-related damage, and liability exposures specific to landlord-tenant relationships.
For brokers working with property investors, understanding landlord insurance fundamentals enables more informed discussions with clients about their coverage needs. This guide provides general information about how these policies typically work, though specific terms and availability vary by insurer and jurisdiction.
General Information Notice
This guide provides general educational information about landlord insurance. It does not constitute insurance advice, and specific policy terms vary between insurers. Always refer clients to appropriate licensed professionals for personalised guidance.
In This Guide
What Landlord Insurance Typically Covers
Landlord insurance policies generally combine several types of coverage to protect property owners against the specific risks of renting out residential property. Understanding these core components helps brokers discuss coverage options meaningfully with clients.
Buildings Insurance
The foundation of most landlord policies is buildings insurance, which covers the physical structure of the rental property against damage from insured perils. This typically includes the main building, permanent fixtures, and outbuildings like garages or garden sheds.
Common insured perils for buildings coverage include:
- Fire, smoke, and explosion damage
- Storm, flood, and water damage (subject to policy terms)
- Subsidence, heave, and landslip
- Impact damage from vehicles or aircraft
- Theft and attempted theft causing damage
- Vandalism and malicious damage
- Escape of water from pipes and tanks
Buildings sum insured should reflect the full rebuild cost, not the market value. Many insurers offer index-linked cover that adjusts the sum insured annually in line with building cost indices.
Contents Insurance
For furnished or part-furnished lettings, contents insurance covers the landlord's belongings within the property. This might include furniture, white goods, carpets, curtains, and other items provided for tenant use.
Contents coverage is particularly relevant for:
- Furnished holiday lets and short-term rentals
- HMO (House in Multiple Occupation) properties with communal areas
- Properties let with appliances and furniture included
- Student accommodation with furnished rooms
Loss of Rent Coverage
Loss of rent (also called rental income protection) covers the rental income a landlord would lose if the property becomes uninhabitable due to an insured event. This provides financial continuity while repairs are completed.
Key considerations for loss of rent coverage include:
- The indemnity period (typically 12, 18, or 24 months)
- Whether alternative accommodation for tenants is included
- Documentation requirements for claiming lost income
- How void periods before the loss event are treated
Property Owners' Liability
Liability coverage protects landlords against claims for injury or property damage suffered by third parties in connection with the rental property. This might include injuries to tenants, visitors, or neighbours resulting from defects in the property or the landlord's negligence.
Standard limits typically range from £1 million to £5 million, though higher limits may be appropriate depending on the property type and landlord's overall exposure.
Common Add-Ons and Extensions
Beyond core coverage, many landlord policies offer optional extensions that address specific risks. These add-ons allow landlords to tailor coverage to their circumstances.
Rent Guarantee Insurance
Rent guarantee insurance (RGI) covers unpaid rent when tenants default on payments. This is separate from loss of rent coverage (which applies to uninhabitable properties) and specifically addresses tenant payment failure.
RGI policies typically have requirements around tenant referencing and may exclude arrears that accumulate before the landlord takes specified actions, such as serving formal notices.
Legal Expenses Cover
Legal expenses insurance covers the costs of legal action related to the tenancy, such as eviction proceedings, rent recovery, or disputes over the tenancy agreement. Coverage limits and qualifying criteria vary between insurers.
Accidental Damage
While standard policies cover damage from specific perils, accidental damage extensions provide broader protection for unintentional damage. This can be valuable for landlords with furnished properties or those concerned about tenant-caused damage.
Terrorism Cover
Standard policies typically exclude terrorism-related losses. Separate terrorism cover may be available, particularly for properties in urban areas or those with higher replacement values. For further context on insurance terminology and concepts, the Wikipedia article on landlord insurance provides general background.
Emergency Assistance
Some policies include or offer emergency assistance services that provide 24-hour access to approved contractors for emergencies like burst pipes, boiler failures, or lock-outs. These services can be valuable for landlords managing properties remotely.
Understanding Common Exclusions
All insurance policies contain exclusions that limit coverage. Understanding these helps brokers set appropriate expectations with clients and identify where additional coverage may be needed.
Typical Landlord Policy Exclusions
Common Exclusions to Discuss with Clients
Exclusions vary by insurer. Always review actual policy wordings rather than relying on general information.
- Wear and tear: Gradual deterioration is not covered; insurance addresses sudden, unforeseen events
- Pre-existing damage: Damage that existed before the policy inception is excluded
- Unoccupancy periods: Extended void periods (often 30+ days) may limit or void coverage
- Illegal activities: Damage arising from illegal use of the property by tenants
- Certain tenant types: Some policies exclude HMOs, DSS tenants, or short-term lets without appropriate endorsements
- Maintenance failures: Damage resulting from failure to maintain the property properly
- Deliberate acts: Intentional damage caused by the policyholder
Warranties and Conditions
Many policies include warranties or conditions precedent that must be met for claims to be valid. Common examples include requirements for:
- Annual gas safety inspections by registered engineers
- Valid electrical installation certificates
- Tenant referencing for rent guarantee cover
- Minimum security standards for locks and alarms
- Regular property inspections
Documentation Brokers Often Need from Clients
When arranging landlord insurance, brokers typically need to gather specific information about the property and tenancy arrangements. Having a clear documentation checklist helps streamline the process.
Property Information
- Full property address and postcode
- Property type (house, flat, maisonette, etc.)
- Year of construction and any major renovations
- Construction type (standard, non-standard, timber frame, etc.)
- Number of bedrooms and bathrooms
- Rebuild cost estimate or professional valuation
- Details of outbuildings, garages, or annexes
Tenancy Details
- Type of tenancy (AST, company let, HMO, holiday let)
- Number of tenants and tenant types
- Monthly or annual rental amount
- Tenancy start date and term
- Whether the property is furnished, part-furnished, or unfurnished
- Details of any letting agent involved
Compliance Documentation
- Current Gas Safety Certificate (CP12)
- Electrical Installation Condition Report (EICR)
- Energy Performance Certificate (EPC)
- HMO licence (if applicable)
- Fire risk assessment (for HMOs and certain flats)
- Legionella risk assessment
Claims History
- Details of any claims in the past 3-5 years
- Any declined insurance applications
- History of subsidence, flooding, or other significant events
- Any ongoing disputes with tenants
Claims Readiness Checklist
Helping clients prepare for potential claims before they occur can significantly smooth the claims process. This checklist covers the key elements of claims readiness for landlord insurance.
Claims Readiness Checklist for Landlords
Maintain a property inventory
Detailed, dated inventory with photographs of the property's condition and contents
Keep receipts and valuations
Proof of purchase for contents and documentation of high-value items
Store documents securely off-site
Digital copies of policy documents, inventory, and compliance certificates in cloud storage
Know the claims process
Insurer contact details, claim notification requirements, and expected timelines
Maintain compliance records
Current certificates that may be required to validate claims
Document tenancy properly
Signed tenancy agreements, deposit protection details, and rent payment records
Know mitigation requirements
Understanding the duty to mitigate loss and what steps to take immediately after an incident
Immediate Steps After an Incident
Advise clients to take these steps immediately when an incident occurs:
- Ensure safety of all occupants
- Contact emergency services if necessary
- Take reasonable steps to prevent further damage
- Document the damage with photographs and notes
- Notify the insurer as soon as possible
- Keep damaged items until the insurer authorises disposal
- Obtain quotes for repairs only from approved contractors if required by the policy