FREE Landlord Insurance Advice
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Having a rental property can be lucrative but it can also be very time-consuming to maintain and expensive should things go wrong. Invariably, issues will crop up and you don’t want all of your rental income to disappear on payments for costly repairs, replacements or legal fees due to unexpected events. With landlord insurance in place, you can have peace of mind that your investment is financially protected.
At Trinity Finance, we can arrange your landlord insurance to ensure that you and your rental property are covered against unexpected events. Safeguarding you financially from damage to the building and your contents, theft, legal expenses, home emergencies, loss of rent and more, this specialist insurance caters to your specific needs as a landlord. Here, we’ll explain what landlord insurance covers, the different types available, the cost and ways to lower your premiums.
What is landlord insurance?
Landlord insurance, also known as buy-to-let insurance, is specifically designed to cover rental properties. With increased risk compared with an owner-occupied property, this type of insurance offers protection that isn’t covered by a standard home insurance policy. Depending on your needs, you can insure a single rental property or cover multiple properties with portfolio insurance.
Just like home insurance, you’re covered for damage to the building and your contents caused by issues such as fire, flooding or burst pipes. This allows you to get repairs or replacements dealt with quickly so as to create minimal disruption for your tenants. However, landlord insurance also provides protection against a variety of other issues associated with rental properties. These can include accidental damage, theft, loss of rental income, unoccupancy and legal issues, such as contract disputes or having to evict squatters.
Do you need landlord insurance?
Having landlord insurance isn’t a legal requirement but your rental property is a significant investment and one that should be financially protected. Unexpected issues can and do happen — this insurance safeguards against damage, loss of rental income and liability claims, ensuring that you’re not left severely out of pocket.
There’s a lot involved when it comes to being a landlord, including finding the right tenants, trying to keep void periods to a minimum, maintaining the property, managing the rental payments and adhering to the right legislation. Arranging landlord insurance is an important part of this, giving you peace of mind that financial protection is in place for you and your property.
It should be noted that standard home insurance is not adequate for the risks involved when renting out your property. As such, if you have this cover in place and find yourself needing to make a claim, it’s unlikely that your policy will be valid.
Although it’s not a legal requirement to have landlord insurance, your mortgage lender may insist that you have it in place if you have applied for a buy-to-let mortgage.
What is covered by landlord insurance?
As with many types of insurance, there are standard inclusions for landlord insurance and optional add-ons, which we’ll detail below. This allows you to tailor your policy to meet your needs, ensuring that you have the right level of cover. Buildings insurance is always included and contents insurance is available to cover any of your belongings that you’ve left in the property. A prime concern for you as a landlord may be rent protection while property owners’ liability insurance offers protection in the event that your tenants or visitors to your property are injured and make a claim against you.
Insurance providers vary with what they offer but a landlord insurance policy usually covers the following as standard:
- The building’s structure
- Fixtures and fittings, such as a fitted kitchen, bathroom suite and built-in wardrobes
- Fire, flood and storm damage
- Burst and frozen pipes
- Subsidence
- Theft
- Appliances and furniture that you have provided for the tenants to use
- Carpets and curtains
- Replacement locks and keys
- Loss of rent
- Accidental damage
- Property owners’ liability
Some insurance providers also include boiler cover as part of the buildings insurance. Alternative accommodation may also be included as standard cover rather than as an optional add-on. This covers the costs of rehousing your tenants while your property undergoes repairs following an insured event, such as a fire.
It should be noted that your tenants’ belongings will not be covered under your landlord insurance policy. As such, they’ll need to take out their own insurance to cover any personal items they have.
If you own a leasehold flat, the freeholder may already have buildings insurance so be sure to double-check this. You can take out fixtures and fittings cover to protect against damage caused to any internal fixtures that aren’t covered under the main building insurance policy.
What is not covered by landlord insurance?
Usually, the following issues are excluded from a landlord insurance policy:
- Wear and tear to the building and your contents
- Damage that has been caused deliberately by your tenants
- Damage caused by pests
- Pet damage. Whilst this isn’t covered as standard, you may be able to add this cover as an extra.
- Your tenants’ belongings
- Unoccupancy, subject to the insurance provider’s terms. For example, an empty property may be covered if a regular maintenance schedule is adhered to. Or it may be covered as unoccupied for a set period before the insurance provider applies an unoccupancy condition.
- Storm damage to fences
What types of properties are covered by landlord insurance?
Different types of properties can be insured as a private landlord, including the following residential types:
- Flats and maisonettes
- Bungalows
- Houses (terraced, semi-detached or detached)
Other rental properties fall under different classifications to residential, including:
- Commercial: This applies to a property rented as a business premise, such as a shop or office.
- Multi-property: You may own more than one buy-to-let property, forming a portfolio. In this case, portfolio insurance is ideal.
- Houses in multiple occupation (HMOs): An HMO isn’t usually covered by standard landlord insurance, with the more specialised HMO insurance being necessary.
Types of landlord insurance
There are various types of cover available with landlord insurance and the following are usually included as standard.
Buildings insurance
Landlord buildings insurance provides protection for the structure of your rental property. Unforeseen events, such as fire, flooding, storms, explosions, impacts, escape of water, subsidence or vandalism, can cause serious damage or worse, destruction, of your property. This insurance helps you cover the repair or rebuild costs should an unexpected disaster occur.
If your rental property is leasehold, check whether the freeholder has arranged buildings insurance and exactly what this covers you for. If you’re financing your property purchase with a buy-to-let mortgage, the lender will usually require you to have buildings insurance in place.
Contents insurance
If you decide to rent out your property as furnished, whether fully or partially, you should consider landlord contents insurance. This covers your belongings, such as appliances, furniture, sanitary ware, carpets and curtains, in the rental property against damage and theft. This contents insurance doesn’t cover your tenants’ belongings. As such, they’ll need to take out separate contents cover for their personal items.
Accidental damage cover can usually be added to your contents insurance. This provides cover if your tenants accidentally damage your belongings, such as with unintentional breakages or spillages.
You can take out a separate contents insurance policy but if you’ve rented your property out as furnished, it can make financial sense to have a combined buildings and contents insurance policy. It’s usually cheaper to have a combined policy rather than two separate ones.
Leaseholders fixtures and fittings
This cover provides protection if you own a leasehold flat and the main buildings insurance policy excludes fixtures and fittings. Examples of items that are covered with this include bathroom suites and fitted kitchens.
Rent income protection
If your property is damaged and you’re unable to rent it out, this covers the rental income you’ll lose as a result.
Loss of rent insurance
If your property is rendered uninhabitable after an insured event, such as a flood or fire, this covers you for any loss of rental income while your property is being repaired. Not all insurance providers include this in a standard policy, in which case it will be available as an optional add-on.
Property owners’ liability cover
This cover provides protection against third-party claims if someone is injured or their belongings are damaged in your property. For example, if a tenant or visitor to the property trips over a trailing wire or a piece of carpet that hasn’t been fitted properly and they are injured as a result, they can make a claim against you. This could result in an expensive payout but this type of protection covers the legal costs, such as the compensation amount and the legal fees. You also usually have access to a 24/7 legal helpline.
Replacement locks and keys
If the keys are lost or stolen, the cost of replacement locks is covered to ensure the property is secure again.
Optional add-ons
You can include extra cover for your rental property and any belongings you have left in it with optional add-ons.
Accidental damage
Whilst some standard policies may include accidental damage, it is usually offered as an optional extra. This provides cover if your tenants accidentally damage your property or contents. For example, they may spill something on your carpet or sofa or they may accidentally break a window or knock over a television that you’ve left in the property for them to use. Accidental damage insurance covers the cost to repair or replace the item that has been damaged.
Although you will have taken a deposit from your tenants, it may not be adequate enough to cover the repair or replacement cost, depending on what has been damaged and the extent of the damage. You also won’t be able to use their deposit until the tenancy has ended. Therefore, having accidental damage insurance can be a worthwhile addition if it’s not included in your standard landlord insurance policy.
Malicious damage
Some policies include this cover as standard although only for people who are unlawfully on your property. It can often be included if you have a higher level of policy with the insurance provider. If it’s not included as standard, you can add this insurance to your policy to have cover against malicious damage caused by your tenants to your property and contents. Unfortunately, tenant disputes do happen and this can sometimes lead to tenants vandalising the rental properties they’re living in, causing thousands of pounds worth of damage. This insurance covers the costs of repairs or replacement of items that have been deliberately damaged so you won’t be left out of pocket should things take a turn for the worse.
Theft by tenant cover
Theft by people who are unlawfully on your property is covered as standard under your landlord insurance policy. However, theft by your tenants or their guests isn’t usually included so you need to take out extra ‘theft by tenant’ cover for this. This covers you for any loss or damage to your property or contents as a result of theft or attempted theft by your tenants.
Legal expenses
Whilst standard landlord insurance usually includes property owners’ liability cover, you usually need to add cover for other legal expenses as an extra. You may incur legal expenses when dealing with problematic issues, such as contract disputes, rent recovery, tax inspections, repossession of your property and eviction of your tenants. With this insurance, legal fees are covered up to a limit specified by the insurer. Access to a 24/7 legal helpline is usually provided with standard cover.
Rent guarantee insurance
If your tenants stop paying their rent, rent guarantee insurance covers your rental income. Even if you’ve carried out thorough reference checks, things happen that may result in your tenants defaulting on the rent. For example, they may be struggling with the cost of living in a bad economic climate, have had to accept a cut in their wages, have unexpected medical bills to pay, have lost their jobs or are withholding the rent as they’re in dispute with you over something.
Rent guarantee insurance usually covers the rental income up to a certain monthly limit over a 12-month period. If the situation hasn’t been resolved with your tenants during this time, it also covers the legal costs for starting the eviction process. To be eligible for this cover, you usually need to have obtained suitable references before the commencement of the tenancy.
Boiler cover
With boiler cover, you can benefit from any issues with the boiler being dealt with quickly. Resolving heating and hot water issues swiftly will keep your tenants happy and ensure that your property is kept in a habitable condition for them.
Landlord home emergency cover
In the event of an emergency in your rental property, this cover provides you with 24-hour assistance. Your insurance provider will send an approved contractor to your property to fix the problem on an emergency call-out. This saves you from having to find a contractor at short notice who’s available to deal with an emergency situation. These situations can include a burst pipe, boiler breakdown, pest infestation, power outage, gas leak, break-in, roofing issue, problem with the drains and more.
The costs of emergency call-out charges, repairs and materials are covered. There is usually a limit per claim, such as a maximum of £500, and a maximum per policy term, such as £1,500.
Alternative accommodation
If your property becomes uninhabitable due to an insured event, such as a fire or flood, this covers the costs of rehousing your tenants while the repairs to your property are being carried out. Some landlord insurance policies include this as standard but this is usually offered as an optional add-on.
Employers’ liability insurance
You may use the services of people to look after your property, such as cleaners, gardeners and caretakers who handle general maintenance and repairs. If so, this insurance covers you if an employee becomes accidentally injured or falls ill as a result of working in your property and makes a claim against you. If you employ anyone to help maintain your rental property – even if it’s on a temporary, part-time or casual basis – then employers’ liability insurance is a legal requirement. Failure to have this in place can result in a fine of up to £2,500 for each day that you’re not insured.
Unoccupied property cover
Standard landlord insurance provides cover when your property is unoccupied on a short-term basis, such as between tenancies or when carrying out renovations. However, if your property remains empty for an extended period, such as 30 days or more, you’ll need unoccupied property insurance. This covers the increased risk of issues faced when your property is left empty, such as vandalism, theft and damage.
Pet damage
Some insurers may offer cover for pet damage as an optional add-on.
Protected no-claims discount
You may be able to protect your no-claims discount if you haven’t made a claim for a specific period, such as 5 years or more.
What excess is payable?
When claiming on your policy, an excess is usually payable. This is effectively your contribution towards the claim and the insurance provider will pay the rest. Excess amounts vary between providers and the cover you have. One provider may offer an excess as low as £100 while another provider may have a minimum of £250. For an example of the differences in cover, the standard excess may be £250 while the excess for subsidence may be much higher at £1,000.
The amount of excess you agree to determines the cost of your insurance policy. Usually, the higher the excess you can pay, the lower your premiums should be. Just be sure that this excess is an affordable amount for you if you have to make a claim. Some providers also offer the flexibility to reduce your excess and pay higher premiums instead.
How much does landlord insurance cost?
Your rental property, situation and insurance needs as a landlord are unique and, as such, your policy will be tailored for you. Therefore, the amount you pay for your landlord insurance will depend on various factors. These include:
- Your property’s size and age. The older your property, the more likely it will be to need more upkeep and repairs to keep it in good condition. The more rooms in your property, the more it will cost to rebuild and replace the contents. Both of these factors can increase your premiums.
- The location of your property. Some areas increase your likelihood of making a claim — for example, if there’s a high crime rate or the area is prone to flooding. As such, your premiums are likely to be higher.
- The level of cover you have. The level of cover you choose affects how much you pay for your insurance. On the one hand, you need to make sure that you’re not underinsured. On the other hand, however, it doesn’t make financial sense to pay for optional extras that you don’t necessarily need.
- Your tenants. Some types of tenants are considered to be higher risk. For example, a group of students increases the risk compared with a professional couple or a family. Tenants with pets also increase the risk level.
- Your claims history. Your claims history tells insurance providers how likely you are to make a claim. If they can see that you’ve made frequent claims, this can push your premiums up.
- The excess level. The higher the excess amount you agree to, the cheaper your premiums usually are.
- Whether you pay annually or monthly. It is usually cheaper to pay for your policy annually rather than monthly. Lenders tend to add interest to payments made in monthly instalments.
Can you benefit from cheaper landlord insurance premiums?
There are various steps you can take to lower the cost of your landlord insurance premiums, as detailed below.
Increase the property’s security
Ensuring that your property is protected with good security lowers the likelihood of it being burgled. As this reduces the risk of a claim for the insurance provider, they may reduce your premium as a result. Consider installing security features like a burglar alarm, solid locks on the doors and windows and CCTV.
Maintain the property regularly
By keeping on top of the maintenance, you lower the chances of something going wrong in the property. This, in turn, reduces the likelihood that you’ll need to make a subsequent claim and your insurance premiums should be cheaper as a result.
Reduce periods of unoccupancy
Empty properties are at higher risk of being broken into, vandalised or suffering greater damage when an issue has gone undetected, such as a burst pipe. Try to avoid having gaps between your tenancies so that the property isn’t left vulnerable to damaging incidents. Reduced unoccupancy periods can lead to cheaper premiums while you may have to pay higher premiums if the property is left unoccupied for too long.
Increase the excess
The excess is the amount you contribute towards a claim. Agreeing to a higher excess can bring the cost of your premiums down. Just ensure that this is an affordable amount as you’ll need to pay it in the event of a claim.
Combine your policies
It can be cheaper to combine your insurance policies into a single policy rather than taking them out individually. For example, combining buildings insurance and cover for your contents. This also makes them easier to manage with one payment and one renewal date.
Be selective with the optional add-ons
Whilst you don’t want to be underinsured, there’s no point in including some extras if they’re not relevant to your needs. This will just bump up the cost of your insurance premiums so only select those that are needed.
Ensure the rebuild value is correct
Check that the rebuild value is realistic. On the one hand, you don’t want to undervalue this as you could be left severely out of pocket in a worst-case scenario. On the other hand, overestimating the rebuild cost will push the price of your premiums up so that you’ll end up paying more than is necessary.
Consider the types of tenants
Some tenants are considered to be riskier than others, such as groups of students or those claiming housing benefit. If you choose your tenants carefully, such as a family or a professional couple, you won’t be penalised with higher premiums.
Pay annually rather than monthly
Insurance providers usually add interest to premiums paid in monthly instalments. Therefore, paying for your policy annually helps to reduce the cost.
We can undertake price and product comparisons on your behalf
Our mortgage brokers will go through all aspects of landlord insurance carefully with you to ensure that you have the right balance between cover and price. It’s not worth the risk of cutting back on your premiums, for example, and leaving yourself and your property at risk. On the other hand, you don’t want to pay an excessive amount if there’s no need. Our brokers will also compare different insurance providers’ policy terms and costs, providing you with impartial advice on each. One may offer cheaper premiums, for example, but charge a higher excess or not offer the exact cover you’re looking for.
What do you need to get a landlord insurance quote?
To get a quote for your landlord insurance, you need to provide some basic information. This can include:
- Details of your rental property. Key information is needed, such as your property’s age, location and construction materials, its rebuild value, whether it is a residential or commercial property and how long you have owned it.
- Basic tenant information. This includes details of their employment status and any reference checks you have carried out.
- Details of your existing policy. If you already have a landlord insurance policy, it can be helpful to provide basic details or a copy of the documents.
- Claims history. Details of any previous claims history need to be provided.
- The cover you require. You need to specify the level of cover you want, including any optional extras. For example, if you need contents insurance as well as buildings insurance, you need to know the replacement costs for the items in your inventory.
We can arrange the right level of cover for your landlord insurance
As an investment that has cost you a considerable amount of time and money, it’s essential to financially protect your rental property. No, landlord insurance isn’t a legal requirement but without it, you risk putting yourself severely out of pocket should events take a turn for the worse.
Consider how you would pay for the rebuild costs if a fire destroyed your property. Or how you would pay to replace the contents in your furnished property if it was flooded. Would you be able to find the funds needed to cover the legal costs should you have to start the eviction process for your tenants? Unfortunately, these types of issues can and do happen so it’s better to be financially safeguarded against them.
At Trinity Finance, our mortgage and protection brokers are well-versed in arranging landlord insurance. They can compare quotes on your behalf, saving you time, and tailor the insurance policy to meet your specific needs as a landlord. They can also guide you on ways to lower your premiums, such as by enhancing your property’s security. Going through the details carefully with you, our mortgage and protection brokers can ensure that you have the right level of cover in place, without the risk of being underinsured or overinsured.
Whether you need to insure one or multiple rental properties, just give us a call on 01322 907 000. Alternatively, email us at info@trinityfinance.co.uk or send an enquiry via our contact form. One of our landlord insurance experts will reply to you as quickly as possible with more information. You can rely on impartial advice and bespoke guidance when it comes to insuring your rental property.
FAQs
Will your normal home insurance cover you?
No, standard home insurance is designed to cover the home you live in. Landlord insurance, on the other hand, covers an investment property that you use to earn a rental income. Whilst both types of insurance provide cover for the same issues, such as damage caused to the building, landlord insurance also caters to the specific risks associated with renting a property to tenants.
As you’re not living in the property and your tenants aren’t as concerned about its condition as you are, issues may be left unattended to. For example, your tenants may not notice maintenance issues that you would or they may just leave them until they get a lot worse. Your tenants may cause accidental or even malicious damage to your property. Another concern when renting out your property is that the tenants may stop paying the rent. You can also be held liable if a tenant is injured in your property and makes a claim against you.
As the issues you may face as a landlord are different to those you’d experience in your home, your normal home insurance isn’t sufficient. Landlord insurance is specifically designed to cover the extra risks involved with having a rental property.
Do you still need landlord insurance if you reside in the property?
This depends on whether the person you’re renting your property to is a tenant or a lodger. For a lodger – someone who lives in your home – you can usually extend your home insurance to cover you for this. If you have agreed that you cannot enter their room without permission, however, they are classed as a tenant. In this case, your home insurance won’t cover you and you’ll need a specialist type of landlord insurance to cover you as a resident landlord.
Can you insure multiple properties?
Yes, you can either insure each property individually or insure multiple properties under the same policy. This is called portfolio insurance and is a good way to streamline the management of your rental properties. It allows you to deal with one set of paperwork, one renewal date and one premium payment each year instead of several.
Landlord portfolio insurance conveniently covers different types of properties and tenants. It is created on a bespoke basis to suit your unique circumstances as a portfolio landlord. You can add or remove properties from the policy throughout the term, ensuring the insurance is updated as your portfolio develops. You may also benefit from a cheaper premium by insuring multiple rental properties under one policy.
Insurance providers vary with the number of rental properties they can insure under the same policy. For example, some may insure up to five properties, some up to 10 and others may agree to a maximum of 50 properties.
Is an excess payable?
Yes, usually an excess is payable when you claim on your policy. The amount varies between insurance providers, such as a minimum of £100 or £250. There may also be differences between the types of cover, such as £250 excess for standard cover but £1,000 excess for subsidence. If you are able to afford a higher amount of voluntary excess, you can usually benefit from lower premiums.
Can you insure your property when it’s empty?
Yes, you can insure your property when it’s empty, such as between tenancies or if you’re carrying out work on the property. However, if it remains unoccupied for an extended period, such as 30 days or more, standard landlord insurance won’t cover you. This is because your property is at more risk of theft, vandalism and damage when it is left standing empty. In this case, you need unoccupied property insurance. Your insurance provider may set some conditions for this specialist insurance. For example, they may require you to enhance the security at the property and make regular inspections to check its condition.
Can you insist that your tenants have insurance?
No, just like landlord insurance isn’t a legal requirement for you, it’s not mandatory for tenants to insure their belongings when renting your property. It’s a good idea, however, to stress the importance of taking out their own insurance to protect their belongings. Otherwise, they may just assume that they’re covered by your insurance.
Are you covered for student lets with landlord insurance?
Yes, landlord insurance covers various tenant types, including students. Your premiums may be slightly higher, though, as insurance providers consider students to be a higher risk than other tenants, such as working professionals or families.
Can you transfer your landlord insurance to a new owner if you sell the property?
No, if you sell your rental property, you’ll need to cancel your landlord insurance policy. The new owner will need to arrange their own landlord insurance if they are going to continue using the property for rental purposes.
Is landlord insurance tax-deductible?
Yes, as it’s a business expense, landlord insurance is tax-deductible. This means that you can claim your expenses to lower your tax bill. Other expenses relating to your rental property are also tax-deductible. These can include the costs of maintenance and repairs, maintenance services (for example, cleaners or gardeners), letting agent fees, your accountant’s fees, property management fees, council tax, gas and electricity charges and water rates.
Do you have to take out boiler cover as a landlord?
It’s not mandatory to have boiler cover although it can be a good idea to have this in place. The boiler is your responsibility and you need to ensure that it is serviced and repaired when necessary. If the boiler stops working, having boiler cover means that a contractor will be sent to have a look at it quickly. Having any boiler issues swiftly resolved will keep your tenants happier.
Although boiler cover isn’t mandatory, it is a legal requirement to have an annual gas safety check carried out. This includes the boiler and any other gas appliances you own that are in the rental property.
Do you need tenant references to get landlord insurance?
Not all insurance providers require tenant referencing although it is recommended. You should take steps to ensure that a potential tenant is suitable to rent your property. Carrying out a credit check, asking for a previous landlord’s reference and checking their affordability for the rent all help to reduce your risk as a landlord. These checks can help determine whether non-payment will be an issue and whether they’ll look after your property.
Although an insurance provider may not require tenant referencing for some landlord insurance cover, such as buildings and contents, they may need it if you want other types of cover. For example, legal expenses or rent guarantee cover. It’s important to check this with your insurer as you don’t want to run the risk of a claim being affected if you don’t meet their referencing requirements.