Residential Landlord Insurance – What does it cover?


When you rent out a property, in whatever capacity, you need to have the right insurance in place. For both you and your tenant. It is important that you understand that this is not home insurance as you would perceive it to be and that the level of cover you have is correct. Often you will find that if there is a fire or flooding home insurance would not cover your property if let out. The contents may also not be covered by a standard home policy.

There are different types of landlord insurance cover. Such as commercial landlords insurance, business insurance for a registered office and associated risks and insurance for unoccupied properties. There are various areas covered such as employers liability insurance and public liability insurance. It is important that you know that the buildings insurance cover you have is correct.

Renting out a property brings a new set of risks, see our article on Landlords responsibilities. You need to ensure that your investment is secure and protect it as much as possible.

Residential Landlords Insurance and Commercial Landlords Insurance covers risks your home insurance wouldn’t. There are various levels of cover available. You should ensure that there is contents cover, fire and flooding cover. Unoccupied properties cover, employers liability and public liability insurance if required. It is important that you make sure that your investment is secure and protected. Also that you don’t run the risk of having a claim rejected. If you are trying to make a claim on residential insurance that is not correct for rental properties.

There are differences between residential building insurance and commercial landlords insurance contained in other articles.

Landlord insurance covers everything from residential insurance such as buildings insurance and contents. Tailored and extended to cover your tenanted property and take on all the risks as follows:-


Rehousing costs/Loss of Rent/Alternative Accommodation

This type of cover comes into effect when the property becomes uninhabitable possibly due to fire or flood. It could be any such insured events even earthquake. It would enable you to make sure that you’re insured for loss of rental income and alternative accommodation. If you have a standard residential policy on your building it would not cover this as they are not for commercial landlords. Landlord insurance can also be extended to cover non-payment of rent by defaulting tenants. But this is separate insurance and you would need to speak to us on this.

Most landlords’ insurance policies have a period where the property can be vacant when having a changeover of tenancies. This can range from thirty to ninety days dependant on your policy. But thereafter it is your responsibility to make sure that the insurance company’s informed. You would then go onto a limited amount of perils known as FLEA fire, lightning, earthquake and air crash. It is important that your property is not unoccupied for any length of time because it could affect your policy but you need to speak to your insurance company or ourselves.


Malicious Damage and Theft

Landlord insurance cover often covers wilful damage caused by tenants. This could be for instance where they have left the property and stolen certain items. Such as an oven etc. It could be a boiler or anything else within the property that they may wish to take. It is important that you understand that as this is malicious damage it isn’t covered by every policy. But by most and you should check. Residential/home insurance would be unlikely to cover you for this or any acts of vandalism.

Accidental damage will also be in some policies. It is the cost of repairing or replacing property or contents damaged as a one-off incident. This cover will come under your landlords’ contents insurance. So it is important that you check your level of cover. Not all Insurance Companies have this within their policy. But we can confirm whether this is the case or not. It can be a one-off by some insurance companies and you should check your policy. Accidental damage will not cover wear and tear of an item over a period of time. It is there for one-off events such as a tenant dropping red wine on a carpet. It will not cover the tenants own furniture or belongings within the property. They need to have their own tenants’ contents insurance.

It is important that you familiarise yourself with your policy. To understand what it includes and does not.


Liability Insurance

It is important that you understand your landlord responsibilities. You have a duty of care to your tenants. Residential insurance will not cover you for public liability. If someone injures themselves as a tradesman or a guest then you are responsible. It is important that you have the correct cover. Landlord buildings insurance covers you for any accidents and injuries to your tenant. It can be the case that there are serious injuries as a result of a landlords negligence. Such as loose tiles, water leaks, burst pipes, broken floorboards or ripped carpeting. Which could result in a hefty claim from your tenant. Your landlord insurance would cover you for the cost of this. An insurance company would pay them directly.

If you did not have the correct cover or the right insurance then you could end up facing a crippling bill. That could affect your cash flow. It is not the compensation that has to be paid but all legal expenses by the tenants or contractors solicitors. The landlords responsibilities have increased again by the recent Human Habitation Bill that has become law. It is important that you understand your responsibilities. 


Legal Expenses cover

Did you know as a landlord that your property qualifies as a business? You thus need to have the right insurance for any legal liabilities. Often landlords don’t expect there to be disputes with right of ways or with neighbours. But it can be that this is covered by your landlord building insurance. If a tenant makes a claim against you as outlined above then you would be insured for legal expenses. Not all policies cover the landlords fully. It is important that you understand what is included in your policy.

Legal expenses will not cover you for taking any tenant to court for non-payment of rent. This is a separate rent guarantee scheme that would need to be taken out and we can give you a quote for this.

Landlord Insurance protects landlords from risks associated with their rental property. It usually includes buildings and contents insurance. But it can also include specific cover as we have outlined above such a property owner’s liability, loss of rent and tenant default insurance. It is important that you have the right cover. Landlord insurance will also cover you for the cost of repairing or rebuilding your property if the structure is damaged or destroyed. It can be extended to various optional extras such as furniture and rental payment insurance.


Do I need landlord insurance?

If you have one or more rental properties, it is important to make sure that you have got the right insurance in place. A standard home insurance policy won’t cover you for risks associated with renting out your property. Whilst landlord insurance isn’t a legal rule it is often needed by mortgage lenders.

There is no legal obligation for a landlord to take out a dedicated insurance policy. But, conventional home insurance won’t cover you for rental activities. If you have a mortgage on your property it is very likely that your lender will need you to take out insurance before you take on tenants. It’s important to note that you will need written permission from your mortgage lender before you let the property. Failure to get this may mean that you may be breaking the terms of your mortgage.

You can choose a range of cover designed for landlords, including property owners liability insurance, contents insurance and buy to let buildings cover. Learn more about the difference between standard homeowner insurance and landlord insurance by reading our various articles. Don’t hesitate to contact us to discuss your requirements.

We are landlords insurance specialists and can offer tailored policies to cover all your requirements. Compare landlord insurance with iInsure365.