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There are a lot of options when it comes to selecting landlord insurance, so we've broken it down for you.
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Written by
Ben Luxon
PUBLISHED ON
Mar 1, 2023
Landlord insurance is there to protect your investment asset, and in the grand scheme, it’s relatively affordable. On top of this, if you have a mortgage many lenders will require you to have adequate coverage. The problem is that there are a lot of types of insurance for landlords to choose from, and it can be confusing.
First and foremost, if you haven’t got a policy, or if you’re looking to renew your existing landlord building insurance policy, or if you’re simply looking for quotes, then it might be an idea to talk to a specialised insurance broker, so you get access to professional advice and a wide selection of products.
As mentioned, while you don’t need to get landlord insurance, it is definitely advisable. At the bare minimum, you should consider “building insurance” which covers the building against damages, or “building & contents insurance” which covers both the building and the internal contents.
Typically, landlords with furnished properties opt for building and contents cover, while everyone else heads towards the standard building cover. However, like any other kind of insurance, there are policies for everything and you will want to consider your actual needs carefully when selecting the policy best suited for your property.
What your landlord insurance policy covers is highly dependent. There are different types of landlord insurance available, such as "Landlord Building & Content Insurance," "Landlord Rent Guarantee Insurance (RGI)," and "Landlord Maintenance, Emergency & Boiler Cover Insurance", to name a few.
Each type of insurance is designed to serve a particular purpose, but some policies may offer coverage for multiple areas. For instance, a policy could cover building, contents, and RGI all at once. It's also possible to obtain separate policies from the same or different companies to cover different situations.
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This insurance provides protection for the structure of your rental property in case it is damaged or destroyed by an insured event, such as fire, weather damage, subsidence, burst pipes, theft or vandalism.
There are numerous policies available, with new ones frequently being introduced, so it's important to choose the right one that suits your individual needs to avoid either over-insuring or under-insuring.
A contents insurance policy does what the name suggests, protecting the contents of the property. If you’re letting out a furnished property then you’ll likely want to consider the contents insurance to cover the cost of repairing or replacing household furnishings, white goods (cooker, oven, fridge, freezer, etc.), and personal possessions.
However, if the property is unfurnished, it's the tenant's responsibility to obtain their own suitable tenants contents insurance policy to cover their belongings. Landlords are not obligated to insure their tenants' possessions.
Purchasing content insurance together with building insurance under the same policy from the same insurer is generally cheaper, but you can also get separate policies.
Rent guarantee insurance protects landlords against loss of rent, commonly used when tenants fall into arrears or refuse to pay rent. This insurance only covers rental loss and has nothing to do with the property or its contents. Rent insurance can be cost-effective and saves landlords money in rent arrears and legal fees, making it increasingly popular among landlords for the peace of mind it provides.
Related: What is a rent guarantor and when should landlords require one?
Boilers are a crucial and costly appliance for maintaining a BTL rental property. This insurance policy is designed to cover the boiler and central heating systems, including repairs, servicing, gas safety inspection (a legal requirement for landlords), emergency callouts, etc.
Plans typically start at £15 per month. It’s worth noting that an annual gas safety inspection (CP12 Certificate) alone costs about £70 - and that cost may be included in your insurance policy.
These insurance products are relatively new but gaining popularity among landlords because of their convenience. They provide comprehensive coverage for various aspects of home maintenance, such as heating, plumbing, electrics, and more, including boiler care plans.
One of the most heavily advertised plans is the landlord home emergency plan from British Gas, which promises prompt emergency response within 24 hours, depending on the situation. For a monthly fee of around £15, you can avoid the high cost of emergency callouts, and sometimes just one callout can cover the cost of an annual policy.
Essentially, this kind of policy will cover maintenance and repairs specifically for appliances. This can include all major white goods, such as washing machines, fridges, freezers, dishwashers, tumble dryers, microwaves, etc. And often if they can’t repair it, they’ll replace it.
This is a particularly useful solution for landlords that don’t live locally and have to get professional for all callouts. Especially if there’s a history of expensive appliance repairs.
This type of insurance covers legal expenses related to tenant eviction or other legal disputes with tenants. If a tenant falls behind on rent and refuses to leave the property, the legal costs of evicting them can quickly add up, particularly if it ends up in court. Legal fees insurance can help cover these costs.
This can often be joined to an existing policy such as your RGI insurance policy.
Public liability insurance covers accidental injuries that your tenants may sustain while on your property, such as a fall down the stairs.
Public liability coverage is often included in insurance policies, but it's always worth checking to ensure you’re properly insured against potential liability claims that might be brought against you.
In England or Wales, residential landlords are not legally required to hold any type of insurance policy. However, obtaining insurance policies can provide peace of mind and security.
Buy-to-let properties are significant investments, often the largest you will make, so it’s essential to protect your finances from unexpected events. Events that can occur more frequently than anticipated. Evaluate your needs and obtain the necessary insurance policy or policies.
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Read and understand all the terms and conditions in your proposed policy. Often the cheapest isn’t always the best suited for your circumstances, and that’s especially true with insurance! If there are any details you are unsure about, ask your policy provider for clarity.
It’s crucial to understand what ‘Fair Wear & Tear’ is, because insurance will not cover any damage due to fair wear and tear. You can read more about it in our Fair Wear & Tear Guide.
Make sure your policy is suited for your specific circumstances so you avoid over or under-insuring.
A lot of insurers impose a “30 day rule”, which effectively means your insurance will be invalidated if your property is unoccupied for 30+ days. However, some insurers are more lenient than others, and you can find ones that allow for either 60 or 90 day vacancy periods. Check your policy to determine how long your property can remain empty for before your policy becomes invalid.
If your property is in an area with a risk of flooding it’s a sensible precaution to ensure your insurance policy actually does include coverage for flood damage (which not all do!).
If there’s ever a change in circumstance, inform your insurer immediately so they can update your policy - otherwise when it comes time to claim you may find yourself with an insurance policy that’s no longer valid (and hasn’t been for a while despite you continuing to pay for it).
Auto-renewing or remaining loyal to your existing insurance provider is often the most expensive way to renew insurance products. Always get new quotes before your current policy is due to expire. Often, your current provider will even match your best quote (as long as it’s a like-for-like product), even if their initial renewal quote was significantly more expensive.
Getting a landlord insurance policy that adequately covers your investment property is a sensible step to take, and one that is often required by lenders (though not by law). It’s recommended you do your research and shop around. When renewing, you may be able to get a better deal if you shop around.
In order to ensure you don’t forget and help you stay on top of routine renewals for things like insurance policies, gas safety certificates, and your EICR, you can use Landlord Studio’s reminder system. Simply set the date and we’ll email and notify you in-app of the upcoming deadline.
Finally, remember that your landlord insurance policy is tax deductible! Track your insurance policies in Landlord Studio - simply set them up as a recurring expense and then you can easily deduct them from your taxable income at the end of the year.
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