While not always legally required, landlord insurance is designed to protect you from the risks associated with renting out a property. In this guide, we’ll break down everything you need to know about landlord insurance, helping you decide whether it’s right for your situation.
What is landlord insurance?
Landlord insurance is a type of insurance for people renting out their homes. Unlike standard home insurance, landlord insurance offers protection for the unique risks that rental properties face. Policies can cover a variety of scenarios, like damage to the property, legal liabilities and even lost rental income if tenants can’t pay.
What does landlord insurance cover?
Landlord insurance policies vary, but they typically include the following:
Buildings insurance
This is the core component of most landlord insurance policies. It covers the cost of repairing or rebuilding the property if it’s damaged by events such as:
Fire
Floods or storms
Subsidence
Vandalism or malicious damage
Burst pipes or other water damage
Contents insurance
If your rental property is furnished, contents insurance is essential. It covers the replacement or repair of items provided to tenants, such as:
Furniture (sofas, beds, dining tables)
Appliances (fridges, ovens, washing machines)
Carpets, curtains, and light fittings
Landlord rent protection insurance
Also known as rent guarantee insurance, this add-on ensures you still receive rent payments if your tenants default or can’t pay. This is particularly useful if you rent to tenants with fluctuating incomes. Policies often include:
A set period of coverage for missed payments (for example, up to 12 months)
Legal expenses for recovering unpaid rent or evicting non-paying tenants
Public liability insurance
This coverage protects you against legal claims if a tenant or visitor is injured on your property. Liability insurance is particularly important for landlords of houses in multiple occupation (HMOs) or larger buildings with shared spaces. For example, if someone slips on a poorly maintained staircase or is injured due to faulty wiring, they may sue you for damages. Liability insurance typically covers:
Legal defence costs
Compensation payouts for injury or property damage
Legal expenses cover
This optional cover helps landlords handle legal disputes, such as:
Evicting tenants who breach their lease
Some eviction costs and possession orders
Disputes over property damage or deposit deductions
Challenging complaints or claims from tenants
Accidental damage cover
This protects against unintended damage caused by tenants, such as:
Broken windows
Stains on carpets or furniture
Damaged appliances
While not always included as standard, accidental damage cover is a popular add-on for properties rented to families or students.
Employer’s liability insurance (if required)
If you employ staff to manage or maintain the property, such as cleaners or maintenance workers, employer’s liability insurance might be legally required. It protects you if an employee is injured or becomes ill as a result of their work on your property.
Unoccupied property insurance
If your property is unoccupied for an extended period - such as between tenancies - your standard landlord insurance may not provide full coverage. Unoccupied property insurance protects against risks like vandalism or weather damage when the property is empty.
Is landlord insurance mandatory?
Landlord insurance is not mandatory by law in the UK, but it's highly recommended. There may also be unique circumstances which make it a requirement. For example:
Mortgage agreements: If you have a buy-to-let mortgage, many lenders require you to have at least
buildings insurance to protect the property.
Tenancy agreements: Some rental agreements may specify landlord insurance to ensure the property is adequately covered.
What UK landlords have to say
Is landlord insurance worth it? We spoke to different landlords around the UK to get their opinions. Here are some thoughts to consider if you're on the fence:
💬 "Strictly speaking, it's optional but is very highly recommended as it will cover your apartment for incidental or malicious damage and things like rental loss. But of course, do your due diligence and read the policy."
💬 "I went with the cheapest for the house as it's a requirement of the mortgage. I doubt I'll ever claim on it unless something catastrophic happens, so cheaper is better for me."
💬 "If something were to go wrong with your day-to-day maintenance or tenant issues, landlord insurance could cover you. A more comprehensive can help ensure that your property remains legally habitable and protect your cash flow - it's a no-brainer for me."
How should you choose landlord insurance?
When selecting a landlord insurance policy, consider the following factors:
Assess your risks: Identify the specific risks for your property, such as location-based risks (like flooding) or the type of tenants you rent to.
Compare policies: Use comparison tools to review different policies and ensure they cover your needs.
Check exclusions: Understand what isn't covered, such as wear and tear or unoccupied periods beyond a set duration.
Tailor your policy: Look for add-ons like landlord rent protection insurance if rent defaults are a concern.
Read the fine print: Ensure the policy terms make sense, including any restrictions or conditions.
How much does landlord insurance cost on average?
The average cost of landlord insurance varies widely in the UK. Typically, the cost will be based on your type of cover and the policies you choose to include. As a rough guide, prices can range between £120 and £250 annually for a standard policy. Though this price can change based on things like:
The property’s location (urban areas or flood-prone zones may cost more)
The property’s size and type (flats, houses, HMOs)
The type and level of cover (basic buildings insurance versus comprehensive packages)
The number of properties insured under the policy
Optional extras, like landlord rent protection insurance, can also increase
premiums
Our top 5 reasons you might need landlord insurance
Protection against property damage: It covers repairs for fire, flood or tenant-caused damage, saving you significant out-of-pocket expenses.
Safeguarding rental income: Policies like rent guarantee insurance ensure you’re not left out of pocket if tenants can’t pay.
Legal liability coverage: It protects you if a tenant or visitor sues for injuries sustained on your property.
Peace of mind: Knowing your investment is protected lets you focus on managing your property without constant worry.
Meeting lender requirements: If you have a buy-to-let mortgage, landlord insurance is often required by lenders.
Common criticisms of landlord insurance
While landlord insurance has clear benefits, some landlords do voice concerns. Typically, these hesitations are caused by:
Cost concerns: Premiums can add up, particularly with extras like rent protection.
Limited coverage: Some policies have exclusions, like tenant negligence or long-term unoccupancy.
Overlapping cover: Landlords with multiple properties might find it challenging to avoid duplicate or unnecessary features across policies.
Claim restrictions: Insurers might impose strict conditions, making it harder to claim for certain damages.
FAQs
Do I need landlord insurance if I have standard home insurance?
No, standard home insurance won’t cover rental activities. You need landlord insurance specifically designed for rented properties.
Can I get landlord rent protection insurance separately?
Yes, many insurers offer rent protection as a standalone policy or as an add-on to a broader landlord insurance package.
Will landlord insurance cover unoccupied properties?
Most policies cover unoccupied properties for a limited period (for example, 30–90 days). Extended cover may require an additional premium.
Does landlord insurance cover tenant disputes?
Legal expenses cover can protect you in disputes with tenants, but it’s often an optional add-on.
Can I pass the cost of landlord insurance to tenants?
No, the cost of landlord insurance is a business expense and cannot be passed directly to tenants as part of their rent.
Final thoughts
Landlord insurance isn’t legally required, but it protects your rental property and gives you peace of mind as a landlord. Whether you’re considering basic building insurance or a comprehensive package, it’s essential to review your specific needs and compare policies. By taking the time to choose the right cover, you can protect your investment and minimise risks effectively.
If you have a legal issue that you can't resolve, speak to one of our landlord solicitors today.