Landlord Insurance: What Coverage Do You Need?

Landlord Insurance Guide: What You Need

Standard home insurance does not cover rental properties. The moment you let a property to a tenant, you need specialist landlord insurance. The right policy protects you against financial losses that could otherwise be catastrophic: a fire that guts the building, a tenant who stops paying rent, a visitor who injures themselves on your property.

But landlord insurance is not a single product. It is a collection of covers that you assemble based on your property type, letting arrangement, and risk appetite. This guide explains each element, what it covers, what it costs, and whether you need it.

Buildings Insurance

What It Covers

Buildings insurance covers the structure of the property: walls, roof, floors, ceilings, permanent fixtures (fitted kitchens, bathrooms), doors, windows, and outbuildings. It protects against damage from fire, flood, storm, subsidence, falling trees, impact, theft, vandalism, and similar perils.

It also typically covers the cost of alternative accommodation for the tenant if the property becomes uninhabitable.

Do You Need It?

Yes, almost certainly. If you have a buy-to-let mortgage, your lender will require buildings insurance as a condition of the loan. Even if you own the property outright, the financial risk of an uninsured building loss is enormous. Rebuilding a typical three-bedroom house costs 200,000 to 350,000 pounds or more.

If the property is a flat, buildings insurance is usually arranged through the freeholder or management company and included in the service charge. Check that adequate cover is in place.

How Much Cover

Insure for the rebuild cost, not the market value. The rebuild cost is what it would cost to rebuild the property from scratch, including demolition, materials, labour, and professional fees. The Association of British Insurers and the RICS publish a guide called the Building Cost Information Service (BCIS) that provides typical rebuild costs by property type and region.

You can also commission a rebuild cost assessment from a chartered surveyor for about 250-500 pounds.

Typical Cost

Buildings insurance for a standard buy-to-let property typically costs 150-400 pounds per year, depending on the property's size, location, construction type, and rebuild value.

Contents Insurance

What It Covers

Contents insurance covers items you own within the property: furniture, appliances, curtains, carpets (if you supplied them), white goods, and other moveable items. It protects against damage, theft, and accidental loss.

Do You Need It?

Only if you let the property furnished or part-furnished. If the property is unfurnished and the tenant provides all their own furniture and belongings, you may still want to cover any items you have left (for example, a cooker, fridge, washing machine, or carpets).

Contents insurance for landlords does not cover the tenant's own belongings. Tenants should arrange their own contents insurance (though many do not).

Typical Cost

Landlord contents insurance typically costs 50-200 pounds per year depending on the value of items insured.

Landlord Liability Insurance

What It Covers

Property owners' liability insurance covers your legal liability if someone is injured or their property is damaged as a result of a defect in your rental property. For example:

• A tenant trips on a broken step and breaks their wrist
• A visitor is injured by a collapsing ceiling
• A water leak from your property damages a neighbouring property

It covers compensation awarded by a court plus your legal defence costs.

Do You Need It?

Yes. While not strictly a legal requirement, the financial exposure is significant. A serious injury claim could run to hundreds of thousands of pounds. Most landlord insurance policies include liability cover as standard, typically up to 2 million or 5 million pounds.

Typical Cost

Usually included in a combined landlord policy. As a standalone add-on, expect 30-80 pounds per year.

Rent Guarantee Insurance

What It Covers

Rent guarantee insurance (RGI) pays your rental income if the tenant stops paying rent. Policies typically cover:

• The monthly rent (up to a specified maximum, often 2,500 pounds per month)
• A specified claim period (usually 6, 12, or 15 months)
• Legal costs associated with recovering possession

Some policies also cover the costs of eviction proceedings.

Do You Need It?

This is a judgment call based on your financial resilience and risk tolerance. Consider it if:

• You depend on the rental income to cover the mortgage
• You have limited cash reserves
• You let to tenant groups with higher arrears risk
• You want peace of mind

RGI typically requires that the tenant passes referencing criteria specified by the insurer (usually a minimum income of 2.5 times the rent and a satisfactory credit check). If you skip referencing or accept a tenant who does not meet the criteria, the insurer may refuse to pay a claim.

Typical Cost

3-5% of the annual rent. For a property renting at 1,000 pounds per month (12,000 pounds per year), expect to pay 360-600 pounds per year.

Claims Process

If the tenant falls into arrears:

1. Notify the insurer as soon as arrears begin (most policies require notification within a specified period, often 30-45 days)
2. Provide evidence of the arrears and the referencing carried out at the start of the tenancy
3. Follow the insurer's prescribed arrears recovery process
4. The insurer pays the rent and manages or funds the legal process

Maintaining clear records of your arrears communications is essential for successful claims. Timestamped records through Togal showing when you notified the tenant, what steps you took, and when you contacted the insurer can be the difference between a paid and a declined claim.

Legal Expenses Cover

What It Covers

Legal expenses insurance covers the cost of legal proceedings related to your rental property, including:

• Eviction proceedings
• Disputes over deposit deductions
• Defending claims brought by tenants
• Tax investigations related to rental income
• Contract disputes with contractors

Do You Need It?

A single possession case can cost 1,500-5,000 pounds in legal fees. If you do not have rent guarantee insurance (which often includes legal cover), standalone legal expenses cover is well worth considering.

Typical Cost

50-150 pounds per year as a standalone policy. Often included in rent guarantee insurance or available as an add-on to a landlord policy.

Loss of Rent Cover

What It Covers

Loss of rent cover (sometimes called "loss of rental income") pays your rental income if the property becomes uninhabitable due to an insured event -- for example, a fire or flood that requires the tenants to move out while repairs are carried out.

This is different from rent guarantee insurance. Loss of rent covers situations where the property cannot be lived in. Rent guarantee covers situations where the tenant can live there but is not paying.

Do You Need It?

Yes, if you depend on the income. Major repairs after a fire or flood can take months. Loss of rent cover ensures you are not paying the mortgage out of pocket during that period.

Typical Cost

Usually included in a comprehensive landlord buildings policy. Verify the cover period -- some policies cover 12 months, others 24.

Malicious Damage Cover

What It Covers

Malicious damage cover protects against deliberate damage caused by the tenant. Standard buildings and contents policies may exclude damage caused by tenants, so this is a critical add-on.

Examples: a tenant punches holes in walls, smashes kitchen fittings, or destroys carpets before leaving.

Do You Need It?

Strongly recommended. Tenant damage is one of the most common and costly issues landlords face. Without this cover, you bear the full cost of repairs.

Typical Cost

Usually available as an add-on to a landlord policy for 50-150 pounds per year. Excess levels tend to be higher than for other types of claim (often 500-1,000 pounds).

Accidental Damage Cover

What It Covers

Accidental damage covers unintentional damage to the property or its contents. A tenant accidentally puts a foot through a ceiling while in the loft. A delivery driver reverses into the garden wall. A child draws on the walls with permanent marker.

Do You Need It?

Optional, but useful for furnished properties or properties with higher-end finishes. For basic unfurnished lets, the cost may not be justified.

Typical Cost

30-100 pounds per year as an add-on.

What Standard Policies Do Not Cover

Read your policy carefully. Common exclusions include:

• Gradual deterioration -- Wear and tear over time is not covered. A roof that slowly degrades is maintenance, not an insured event.
• Pre-existing defects -- Damage that existed before you took out the policy.
• Unoccupied property -- Most policies limit or exclude cover if the property is empty for more than 30-60 consecutive days (see below).
• Certain types of tenant -- Some policies exclude DSS/housing benefit tenants or tenants without a guarantor. Check the terms.
• Illegal activity -- Damage resulting from criminal activity by the tenant (for example, cannabis cultivation) may be excluded, though some policies cover this.
• Terrorism -- Some policies exclude terrorism damage, although Pool Re provides cover through commercial policies.

Always read the policy wording, not just the summary.

How Premiums Are Calculated

Insurers assess risk based on:

• Property type and age -- Older properties, non-standard construction (timber frame, flat roof, thatched), and listed buildings attract higher premiums
• Location -- Areas with higher crime rates, flood risk, or subsidence history cost more
• Rebuild value -- Higher rebuild costs mean higher premiums
• Tenant type -- Students, housing benefit tenants, and tenants in temporary accommodation may increase the premium
• Letting type -- HMOs, holiday lets, and furnished lets are typically more expensive to insure than standard unfurnished ASTs
• Claims history -- Previous claims increase premiums
• Security features -- Approved locks, alarms, and security lighting can reduce premiums

Unoccupied Property Insurance

If a property is empty between tenancies for more than 30-60 days (depending on your policy), standard landlord insurance typically reduces or withdraws cover. You may need a separate unoccupied property policy.

Unoccupied property insurance is more expensive and often comes with conditions: regular inspections (weekly or fortnightly), turning off the water supply, and maintaining minimum heating levels in winter.

If you anticipate long void periods -- for example, during major renovation -- arrange unoccupied cover before the property becomes empty.

Portfolio Insurance

If you own multiple rental properties, a portfolio or "block" policy can be more cost-effective than individual policies for each property. Benefits include:

• Single renewal date
• Reduced administration
• Potential volume discount
• Consistent cover across all properties

Portfolio policies are available from specialist landlord insurers and brokers. They are typically available for landlords with three or more properties.

HMO Insurance

Houses in Multiple Occupation require specialist insurance. HMOs present higher risk due to more tenants, shared facilities, and greater wear and tear. Standard landlord policies often exclude or limit cover for HMOs.

HMO-specific policies account for:

• Higher occupancy levels
• Shared cooking and bathroom facilities
• Greater liability exposure
• Additional licensing and compliance requirements
• Higher risk of fire (a leading concern in HMOs)

Premiums are significantly higher than standard buy-to-let insurance. Budget 300-800 pounds per year for a typical HMO.

Excess Levels

The excess is the amount you pay towards each claim before the insurer pays the rest. Standard excesses are typically:

• Buildings: 100-250 pounds
• Contents: 50-150 pounds
• Malicious damage: 500-1,000 pounds
• Subsidence: 1,000 pounds (industry standard)

You can often reduce premiums by accepting a higher voluntary excess. However, ensure the excess remains affordable -- a 1,000 pound excess means you will not claim for anything under that amount.

Making Claims

When to Claim

Claim when:

• The loss exceeds the excess by a meaningful amount
• The damage is covered by your policy
• You have evidence to support the claim

Do not claim for minor issues where the cost barely exceeds the excess. Frequent small claims can increase your premiums or lead to non-renewal.

How to Claim

1. Notify the insurer promptly -- Most policies require notification within a specified period (often 30 days)
2. Document the damage -- Photographs, videos, written descriptions
3. Prevent further damage -- Take reasonable steps to mitigate the loss (for example, arranging emergency boarding for a broken window)
4. Obtain quotes for repair -- The insurer may appoint their own contractor or ask you to obtain competitive quotes
5. Keep records -- All communications with the insurer, contractor quotes and invoices, photographs, and the claim reference number

Comprehensive documentation of the damage and your response significantly improves claim outcomes. Maintaining organised records of your property communications and maintenance through a platform like Togal makes it easier to demonstrate the property's condition before and after an incident.

Claim Outcomes

The insurer will either:

• Pay the claim in full (minus excess)
• Pay a reduced amount (if they determine the loss is partially excluded or the claim is excessive)
• Decline the claim (with reasons)

If you disagree with the outcome, you can complain to the insurer and then escalate to the Financial Ombudsman Service.

Insurance Checklist for Landlords

Essential Cover

• Buildings insurance (to full rebuild value)
• Property owners' liability (minimum 2 million pounds)
• Loss of rent cover

Strongly Recommended

• Malicious damage cover
• Legal expenses cover
• Rent guarantee insurance (especially if mortgage-dependent on rental income)

Consider Based on Your Situation

• Contents insurance (if furnished or part-furnished let)
• Accidental damage cover (for higher-value properties)
• Unoccupied property insurance (if extended voids expected)
• HMO-specific cover (if letting as an HMO)
• Portfolio policy (if three or more properties)

Reviewing Your Cover

Review your insurance annually. Check:

• Is the rebuild value still accurate? (Construction costs increase over time.)
• Has your letting arrangement changed? (For example, switching from a single let to an HMO.)
• Are there new risks? (For example, a new flood risk designation for your area.)
• Is the premium still competitive? (Compare quotes from specialist landlord insurers.)

Do not automatically renew without checking. The renewal price is often higher than what a new customer would pay. A 10-minute comparison could save you hundreds of pounds.

For a broader view of managing your rental property, including the legal and financial setup, see our new landlord guide. For guidance on budgeting for maintenance alongside insurance, see our property maintenance schedule guide.