Standard home insurance doesn't cover rental properties. Here's what specialist landlord insurance includes and why it's essential protection for your investment.
Many new landlords make the expensive mistake of not having appropriate insurance in place. Standard home insurance policies typically exclude properties that are rented out, meaning a claim could be rejected just when you need it most. Specialist landlord insurance is essential.
Buildings insurance
Buildings insurance for rental properties covers the cost of repairing or rebuilding the structure of your property following events like fire, flood, subsidence or storm damage. The sum insured should reflect the full rebuild cost of the property, not the market value.
Most lenders require buildings insurance as a condition of the mortgage, so this is non-negotiable. Ensure your policy explicitly covers rental properties — standard home insurance typically does not.
Contents insurance
If you provide furnished or partially furnished accommodation, contents insurance covers your own furnishings and appliances against damage or theft. Tenants' own possessions are their own responsibility to insure.
Landlord liability insurance
If a tenant or visitor is injured in your property and holds you responsible, you could face significant compensation claims. Landlord liability insurance (typically included as public liability within a landlord policy) protects you against this risk.
Legal expenses insurance
Landlord legal expenses insurance covers the cost of pursuing possession proceedings, defending claims from tenants, and resolving rent arrears disputes through the legal system. Given that contested possession proceedings can cost £2,000-£5,000 in legal fees, this cover offers excellent value.
Rent guarantee insurance
Rent guarantee insurance covers your rental income if a tenant defaults on payments, typically for up to 12 months and up to a maximum monthly amount. This is different to our guaranteed rent service — our service guarantees your rent regardless; insurance products require a claim process.
Finding the right cover
Specialist landlord insurance providers include Hamilton Fraser, Direct Line for Business, Alan Boswell and others. Always compare like-for-like — cheaper premiums may reflect higher excesses or narrower coverage. A specialist insurance broker can help identify the most appropriate policy for your property portfolio.