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June 29, 2022
December 20, 2021

Landlord Insurance Guide

Written by
Steve Sims

Landlord insurance - how does it work and what exactly is covered? Read our handy guide for everything you need to know.

landlord insurance office sign

Table of contents

As the name suggests, landlord insurance is a special policy to cover rental properties - from buy to lets to blocks of flats.

Levels of cover and costs vary between providers, so finding the right policy without some research is a bit of a stab in the dark.

This landlord insurance guide explains the cover most landlords need and how to compare policies so you can buy the best policy at a reasonable price.

What is landlord insurance?

Landlord insurance is a souped-up version of the buildings and contents cover you have in place at home.Landlord insurance broadly comes in four types -

  • Buildings
  • Contents
  • Liability
  • Rent guarantee
  • Emergency call-outs

Each of these types comes with add-ons that cover specific circumstances, depending on the type of property you are renting out. If you have up to three letting properties, you usually have to buy a separate policy for each home. However, landlords with four or more properties can take out portfolio policies covering multiple rental homes.

Miniature house model with a house layout plan

All about landlord buildings insurance

Buildings insurance covers the cost of repairing damage to the structure of the home, from replacing a slipped tile to rebuilding an irreparable property after a fire or flood. Most buy to let mortgage lenders make taking out buildings insurance a condition of the loan.

Calculating rebuild costs

The rebuild cost is not a buyer's price for the property. However, the buyer's price is more because the property value includes an amount for the land the property stands on, which is not part of the rebuild cost.

You can use the rebuild cost calculator provided by the Royal Institution of Chartered Surveyors to work out the figure. The calculator is for brick-built homes, so if you have a thatched cottage or property of unusual construction, you should speak to a surveyor for an accurate rebuild cost.

What does buildings insurance cover?

Most buildings insurance policies cover a range of incidents:

  • Theft, vandalism, malicious damage
  • Lightning strikes, storm and earthquake damage
  • Subsidence
  • Burst pipes
  • Fire or smoke damage
  • Oil or water damage caused by accidents

Buildings insurance for leasehold flats

If you have a leasehold flat in a block, the freeholder usually provides insurance to cover the entire building and includes your share of the cost in your service charge.

It's a good idea to read the freeholder's policy to check for any gaps in cover. A common issue is policies do not cover damage that spreads from one flat to another, such as a fire or leak. If the cover has gaps, consider taking out your own policy.

Contents insurance for landlords

The rule of thumb is buy to let contents insurance covers the moveable items in a rented property owned by the landlord. This cover ranges from protecting a mower in the shed to integrated kitchen appliances, carpets and light fittings. Tenants must take out contents cover to safeguard their possessions.

Real estate agent congratulations to new buyer by giving house model to client in the agency office.

Landlord liability insurance

Landlord liability insurance offers protection if someone living or visiting a rented home suffers an injury while at the property. Typical claims are for slips and trips inside and out of the property.

Liability insurance will cover the costs of a claim, from paying compensation to settling legal costs.In some cases, liability insurance has rescued landlords from the cost of settling frivolous claims from tenants.

Rent guarantee insurance

Some providers bundle rent guarantee cover with landlord buildings and contents insurance, but most charge extra if you want to add this to your policy. Rent guarantee insurance pays the rent if a tenant falls into arrears. In addition, most policies pay legal expenses relating to evicting tenants in arrears.

This cover is worth considering if the margin between rent received and mortgage repayments is tight; otherwise, landlords are expected to pay the mortgage out of their own pockets.

afro american woman calling 911 in New york city. concept about car accidents and emergency

Emergency call-outs

Emergency call-out protection deals with home emergencies, like leaks and broken boilers.

Landlord emergency call-outs typically cover:

  • Plumbing, boilers and heating
  • Roofing
  • Broken doors and windows
  • Lost keys
  • Blocked pipes and drains
  • Infestations
  • Electrical problems

How much does landlord insurance cost?

The price of landlord insurance depends on the type of home you are letting out, where it is, the property's age and rebuild cost.However, a research team from broker NimbleFin have put together some figures for average no-frills policies based on a rebuild cost of £200,000.

Landlord Insurance

Cost Calculations

Annual Premium

Semi-detached house£150

Terraced/End terrace house£156

Individual flat in a purpose built block£164

Detached house£179

Individual flat in a converted building£200

Average£170

Source: NimbleFin

Optional Extra Coverages for Landlords

Annual Premium

Accidental damage (building only)£299

Legal expenses (£50k of cover)£40

Tenant default/Rent guarantee (£12k to £50k of total cover)£46 to £100+

Home emergency (boiler, heating, electric)£144

Landlord's contents (£5k of cover)£290

Landlord's contents (£10k of cover)£303

Landlord's contents (£20k of cover)£321

Source: NimbleFin

Add-on costs depend on the level of cover.

Rent of modern housing sale of new apartment, modern renovation. White furniture with utensils, shelves with crockery and plants in pots, refrigerator in simple minimal dining room, empty space

How to save money on landlord insurance

Here are some ways to save on landlord insurance:

  • Compare quotes from at least three providers
  • Pay for the year instead of monthly to avoid interest charges
  • Check for discounts if you buy online
  • Maintain your rental homes to minimise events that could lead to a claim
  • Consider paying a higher excess for a claim

Don't forget not all landlord insurers are on comparison sites - in some cases you must go direct for a quote.

Find out more about how Oasis Living can help you find the perfect tenants and improve your property management experience.

Head to our website now or contact one of our property experts. See our Guide on renting for tenants here!

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