What Is The Best Landlord Insurance?

antoine fruchard Antoine Fruchard  updated on September 9, 2020

If like many people you’ve invested in a buy-to-let property, or perhaps you’ve moved and are renting out your old home, you’ll need buildings insurance.

But you might also need other kinds of insurance, such as protection against tenants damaging the property or not paying their rent. 

Confused by the various options available?

Don’t worry, we’ve researched the market for landlord insurance and we can tell you everything you need to know – as well as helping you find the best landlord insurance quotes.

What are the best landlord insurances?

Landlord insurance is a specialist insurance and so you’ll find that some of the best landlord insurance quotes come from specialised insurers. So you’ll find names like Alan Boswell and Discount Landlord alongside the better known AXA and Churchill.

InsurerPremium / ExcessBuildings/contents coverRent guarantee as ExtraBoiler /emergency cover Accidental/tenant damageLiability as extraGet quote
logo axa travel1 2Premium: from £120
Excess: £100
  • £5m
  • £75,000
ExtraNoExtraExtraGet quote (discount with this link)
logo city landlordPremium: from £122
Excess: £100 to £250
  • Varies
  • £50,000
Up to 30% of building sumYesYesUp to £5mGet quote (discount with this link)
discount landlord logoPremium: from £127
Excess: £100
  • £1.5m
  • £40,000
Not statedNoExtraExtraAt any insurance agent
logo churchill 2Premium: from £129
Excess: £200
  • £10m
  • £500,000
ExtraLandlord boiler cover as extraExtraUp to £2mAt any insurance agent
alan boswell logoPremium: from £132
Excess: £75
  • Unlimited
  • £350,000
YesAdd-on, £100 per property with no excessExtraUp to £5mAt any insurance agent
premierline logoPremium: from £135
Excess: £100
£20mExtraNoExtraUp to £10mAt any insurance agent
homelet logoPremium: from £138
Excess: £100
VariesExtra
  • Emergency is standard
  • boiler cover extra
ExtraUp to £5mAt any insurance agent
logo lvPremium: from £141
Excess: varies
  • £1m
  • Choice of £10/£25/£50k contents
Not statedNoNoUp to £5mAt any insurance agent
let alliance logoPremium: from £147
Excess: varies
  • £500,000(up to £2m on request)
  • £50,000
ExtraExtraStandardUp to £5mAt any insurance agent
home and legacy logoPremium: from £152
Excess: varies
VariesNot statedYesYesUp to £5mAt any insurance agent
Landlords insurance uk

What is landlord insurance?

Landlord insurance is similar to the home insurance most home-owners take out, but instead of being aimed at owner-occupants, its customers are property owners who rent their properties out.

The private rental sector now accounts for nearly one in four households in the UK, with buy-to-let landlords accounting for much of the supply of properties. That’s a lot of landlords who need to insure their investment – and insurance companies are ready to serve the need.

As a specialised type of home insurance, landlord insurance is split into the same two main types of insurance – building and contents. Landlords may find they need one or the other type of insurance depending on their particular property and rental terms.

  • If you’re renting out a house, you’ll need buildings insurance.
  • If you’re renting out a flat, the building insurance will be provided for the entire block as part of the service charge.
  • If you let furnished, you’ll want contents insurance to cover the furnishings you own.
  • Even if you let unfurnished, you might want to cover white goods, carpets, and other contents you provided with the let.

Additionally to these two main types of cover, insurers have now added different types of cover that are specific to the rental sector, such as rent guarantee  and liability insurance.

If you have a buy-to-let mortgage you may find your lender requires you to take out landlord buildings insurance as one of the conditions of granting a loan. Otherwise, it’s optional – but why would you want to run the risk of leaving your largest investment uninsured?

You will need to get a special landlord insurance. Regular household insurance is only intended to cover owner-occupied houses. You’ll also need a different kind of insurance if you’re renting out a holiday cottage or AirBNB property, or a house in multiple occupation (HMO).

What does landlord insurance cover?

First and foremost, landlord insurance covers the building you are renting out, and the contents of the property, but it can also cover other aspects of your investment.

Comments
Accidental damage
  • Against accidental damage by tenants.
  • A small number of policies will even insure against damage by tenants’ pets.
Malicious damageCovers malicious damage by tenants
Legal expenses insuranceCan cover up to £50,000 in legal expenses – if you have to chase tenants for unpaid rent, or in the case of eviction.
Property owner’s liability cover
  • Included in all landlord policies 
  • Can cover from £1m to £5m.covers you against any legal claims by your tenants, for instance if they are hurt by a gas explosion and claim you hadn’t repaired the boiler.
Home emergency coverCovers the cost of fixing an emergency situation such as a broken boiler or damaged roof
Alternative accommodationCovers the cost of alternative accommodation for your tenants while the damage is being repaired.
Landlord boiler coverCover the boiler and (sometimes) central heating system
Loss of rentCovers loss of rent when your property is being repaired, for instance if tenants have to move out or if the property has to stay vacant because it’s not fit to market.
Rent guarantee insurance (also known as tenant default insurance)Covers you for rental income if tenants can’t or won’t’ pay.usually not included in landlord insurance, but can be added as an extra.
Cover for unoccupied propertyUsually you’ll be covered for a property unoccupied between tenants or during refurbishment policy will state the length of time allowed, usually up to 90 days
Landlord insurance policy

Some of these types of insurance , like rent guarantee cover, are also available separately.

What types of landlord insurance do you need?

There’s no legal requirement for a landlord to have any insurance, though if you have a buy-to-let mortgage your lender may require that you’re have buildings cover. 

What type of insurance you take out depends on your circumstances and the type of rental you offer.

  • We suggest buildings cover is a bare minimum. If the house is destroyed by a fire or flood, are you really prepared to pay to rebuild it out of your own bank account?
  • The same is true of landlord’s liability cover. If a tenant is injured in the property, a negligence claim could cost thousands just in lawyers’ fees, and the sums at stake could be more than the value of the property.
  • If you rent furnished, you probably have some significant money tied up in furnishings, particularly white goods, so it’s well worth considering landlord’s contents insurance. Otherwise, you don’t need it.
  • Landlord emergency cover can be a godsend for self-managing landlords, as the insurance company will arrange for the repairs – you don’t need to. You can give the emergency number to your tenants, and they don’t need to phone you out of hours – it’s looked after by your insurer.
  • If you have a buy-to-let property and you’d find it difficult to cover the mortgage if your tenants missed a month’s rent, you ought to consider rental guarantee insurance. This is critical buy-to-let insurance – less crucial if you don’t have a mortgage, or only have a small amount of the mortgage outstanding. If you want to know more about how much you can borrow for a mortgage, check this page.
Recommended ?Situations
Building coverHighly recommendedGood for emergency situations such as fire or flood
Content insuranceRecommended Is a must have if your house is furnished
Rental guaranteeRecommended if you have  mortgageCovers you if tenants don’t pay
Landlord emergency coverRecommended if you’re managing your own letImmediate help with emergency repairs
Landlord boiler coverRecommended if you’re managing your own letPays for emergency repairs and replacement
Unoccupied property coverUsually includedUp to 90 days while property is unlet or being refurbished
Landlord types of insurance

What to do if my renters can’t pay the rent?

If you have rent guarantee insurance (tenant default insurance) you can claim for unpaid rent.

Once the tenants are a month behind with the rest, you’ll need to contact your insurer. The insurer will probably ask you to start eviction proceedings immediately by serving a Section 21 and/or Section 8 notice.

Is my home insurance enough to cover me if I rent my house?

If you rent out your home while you’re working abroad, or having moved to another property, you may think you can just continue your regular home insurance. But you’ll be in trouble if you do. 

A regular property owners insurance is designed for owner occupiers, not landlords, and you may invalidate it if you rent the property out.

Insurers base their quotes on the total risk, which in the case of a property includes the occupants as well as the home. Tenants are always seen as more of a risk than an owner-occupier, since they don’t have an ownership interest in the property.

Besides, if you want extra cover such as rental guarantee insurance, you’ll need to get landlord house insurance. You won’t get it with regular home insurance.

How much is landlord house insurance?

According to insurance broker Alan Boswell, average landlord premiums run around £230. However, you’ll need to do a proper landlord insurance comparison to find out exactly what your insurance will cost.

When an insurer gives you a quote, it will base the price on various factors including:

  • the size of the property;
  • its location;
  • the total sum insured;
  • any extra cover you’ve asked for, such as home emergency cover;
  • your claims history;
  • the type of tenants – professional and corporate lets are seen as lower risk than student lets, for instance.

How much landlord insurance do I need?

You’ll need to insure the building to cover its full rebuild cost – that is, if it was completely destroyed in a fire or flood, the amount it would cost to replace. This is almost always below the market value of the property, because what you pay for a house includes the value of the land as well as whatever’s built on it.

If you wanted a really precise figure for rebuild cost, you’d have to pay a chartered surveyor to do an in-depth study for you. Fortunately, unless you have an unusual property or one using a non-typical construction method, it’s fairly easy to make an estimate based on simple data like the building’s size and the materials used for the walls and roof. A building cost calculator takes a few minutes to use and will give a sensible figure.

Ideally, you want to ensure that you’re well covered, but not too well. If you have too little insurance, the insurer can cut any payout it makes to reflect the fact.

What are the extras I can add to have a complete protection?

The best extras you can add are rent guarantee insurance, accidental damage cover, and home emergency insurance.

  • Rent guarantee protection will pay the rent if tenants can’t or won’t pay. It will usually pay out for 6 or 12 months while you pursue the legal process of eviction.
  • Accidental damage cover protects you against tenants damaging your property. You may have a deposit, but that may not cover repairs after a major flood caused by a tenant leaving the bath running while they answer the phone!
  • Home emergency cover and landlord boiler cover protect you against unexpected maintenance costs if the boiler breaks down or the roof is damaged in a storm. But it also has the huge advantage that if you manage your own properties, you won’t have to find an emergency roofer, plumber or other tradesperson; the insurance company will do that for you.

Can I insure multiple properties on my landlords insurance?

Yes, you can – and it will be cheaper than insuring them all separately. Many insurers are happy to provide insurance for landlords who have up to 25 properties in their portfolio. You’re likely to get a discount of at least 5% and possibly as much as 10%.

How can I save on my Landlord insurance?

There are a number of ways that you can save money on your landlord insurance. Of course, the first is to shop around. Many landlords buy insurance that’s been suggested by their estate agent or managing agent, and that may not be the cheapest or the most appropriate for you. Make sure you compare landlord insurance from a number of different companies, for instance by checking quotes online.

There are other ways to save on insurance too:

  • Better security will always help to bring down your premiums and can also be a selling point when you’re marketing the property to tenants. A burglar alarm, security lights, and better locks on doors and windows, can all help. Ask your tenants to join the local Neighbourhood Watch team if there is one.
  • If you’re buying a tenant default insurance, buy it with your landlord buildings insurance. It usually costs 20-30% less if you buy it as part of a package.
  • If you own more than one property, you may be able to get a portfolio discount for insuring them together. Even if you have to pay a penalty for closing some of your existing policies early, that may be worth doing to get the discount.
  • Choose a higher voluntary excess. If you make a claim, you’ll then have to pay a higher amount out of your own pocket before the insurer pays out. Obviously, that reduces the risk to the insurer, who can afford to give you a cheaper quote. For instance, Homelet’s compulsory excess is just £100, but you can opt for up to £1,000 total excess.
  • Pay annually. It’s almost always cheaper than making monthly payments. Since insurers are effectively lending you the premium payments for a few months, they generally make a charge for it, just as a bank would charge you interest on a loan.
  • Don’t buy contents cover unless you really need it. If you rent unfurnished and don’t provide expensive white goods or carpets, you’re probably better off without.
  • If you’re a member of the National Residential Landlords Association (NRLA) you may be eligible for up to 30% insurance discounts.

Is Landlord insurance mandatory ? 

Landlord insurance is not mandatory. However, there are a couple of major areas of liability that could bankrupt you if you’re not covered,  and good landlord insurance protects you for a fairly small price.

  • Liability insurance covers you if someone – a tenant or someone visiting them – is injured on the premises. 
  • Legal expenses cover means if you have to take legal action against bad tenants, you’re not going to end up heavily out of pocket.
  • If you own a property that’s worth £250,000 or more, why would you run the risk of a disaster wrecking it?

We think you’d be mad not to insure your investment.

If you’re a buy to let landlord with a mortgage, you may find your lender insists you’re insured. Be sure how much you can borrow when taking out a mortgage with our calculator.

How to make a claim on your landlord insurance?

If you want to claim on your landlord insurance, you’ll need to get in touch with your insurance company. It’s best to make sure you have good evidence to back up your claim, which may mean taking photos of damage, or asking your tenants to do so. If theft or vandalism is involved, you’ll need to inform the police and make sure you have a Crime Reference Number – or if your tenants called the police, make sure they give you the CRN.

It’s always best to call your insurer as quickly as possible. The claims adviser may be able to help you assess what you need to do next – whether that’s issuing a Section 21 notice to tenants, getting quotes for repairs, or finding the service record for your boiler.

Insurers will often ask to see paperwork such as your latest gas safety certificate or maintenance reports – make sure you keep all your paperwork in order so you can reply quickly. A claim can take some time to process, but the fewer paperwork delays, the faster you will get your payout.

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