What is landlords insurance?

Landlords insurance, also known as buy-to-let insurance, is a type of home insurance for people who rent out their properties. 

This type of insurance provides coverage for the unique risks associated with renting out property. For example, if a tenant or guest is injured on your rental property, specialist landlords liability insurance could cover the related legal fees and compensation costs if you’re found responsible. 

Landlords insurance typically includes buildings insurance as standard. Additional coverage may also be included. For example, Hiscox landlords insurance includes buildings insurance, property owners’ liability, and loss of rental income or alternative accommodation cover as standard. 

Buildings insurance 

Landlords buildings insurance is designed to protect a rental property’s physical structure, including the walls, outbuildings, annexes, gates, fences, and any permanent fixtures, such as fitted kitchen units and bathroom suites. It covers the cost of repairs or rebuilding if the property is damaged by events like fire, flood, or storms.

Buildings insurance can help to ensure you can restore the property to a rentable condition after damages. 

Property owners’ liability 

Property owners' liability – also known as landlords liability – insures against legal and compensation claims made against you by third parties for injury or damage on your rental property. 

Loss of rental income 

This covers the rental income which you cannot legally recover from your tenant or the costs of their alternative accommodation while the property is unfit for normal habitation due to an insured event. 

For example, if your property suffers significant water damage through a leaking roof in a storm, loss of rent insurance could cover the rental income you lose while repairs take place. 

You can also choose from various optional extras, such as property owners’ liability, contents insurance, and emergency call-out cover. 

• Landlords liability insurance – covers you against legal and compensation expenses from claims on your rental property. 
• Landlords contents insurance – protects items you keep in your rental property, such as furniture, soft furnishings, audio and visual equipment, and white goods, such as washing machines and dishwashers. 
• Emergency call-out cover – provides assistance following an insured emergency – such as a failure of the main heating system in your rental property.

Landlords insurance is not legally required. However, it can help landlords manage the risks of renting out a property. 

Home insurance typically covers owner-occupied homes and won’t provide coverage for rental properties. Additionally, standard home insurance policies won’t cover risks like property damage, liability, and loss of rental income. 

Some buy-to-let mortgage providers insist on landlords insurance as a condition for loan approval. 

Under the Employer’s Liability (Compulsory Insurance) Act 1969 (external link), most landlords who employ staff are legally required to have £5 million in employers’ liability insurance. Employers’ liability can be added to a typical landlords insurance policy.

Many landlords start by determining their coverage needs. The basic requirement for a landlords insurance policy is typically buildings cover, which can protect the property’s structure and permanent fixtures. 

You might also calculate your property’s full rebuilding cost, which is the price of completely reconstructing your property including any adjoining buildings if it was destroyed. The rebuild value forms your buildings sum insured (BSI), which can determine your insurance premium. Having an accurate BSI can help ensure you have adequate coverage. 

You might then compare inclusions and exclusions. For example, our landlords insurance policies include property owners’ liability and loss of rent cover as standard. However, various additional covers, such as landlords contents insurance, are optional extras. 

You can then consider optional extras, such as: 

• Contents insurance 
• Legal expenses 
• Emergency call-out 
• Employers’ liability. 

Owners of several properties might consider multi-property landlords insurance. 

To find the best policy, you can compare insurers’ quotes, coverage limits, inclusions and exclusions, customer reviews and claims processes. 

If you want to buy landlords insurance from us, you can speak directly to our insurance experts by phone: 0800 247 1902, 9:00am to 5:00pm, Monday to Friday, or contact our customer services team online.

Disclaimer:

Our FAQ pages provide general information and background around the topic covered. FAQ pages are reviewed and monitored periodically by our insurance experts. But the content is not intended to be read as advice and any material is for general information purposes only. If you would like advice for any content, please seek professional assistance.