What Insurance Do You Need as a Landlord?

what insurance do you need as a landlord

As a landlord, are you asking yourself the question, “what type of insurance do I need?” There are many different types of landlord insurance and any landlord insurance policy can also be confusing since so many different variables of a policy respond to many different possible issues.

There is buildings and contents insurance, accidental damages insurance, commercial property insurance, landlord contents insurance – it’s a huge field. With this in mind, what type of landlord insurance do you need above all others?

The type of landlord insurance needed should be heavily prioritised by the essential function of the landlord’s business concerning the property. A landlord insurance policy that works best is typically either a landlord liability insurance policy, buildings insurance, contents insurance, and loss of rent insurance.

Since each individual landlord will likely have a wide range of different business structures with their properties, this guide will look at the overall basics of landlord insurance. We will explore the primary types of landlord insurance to better help you decide which landlord insurance type works best for you. Read on to find out more about this type of insurance and how Glowsure can help.

Types of landlord insurance: which do you need?

Let’s take a look at some of the most common examples of Landlord insurance.

Landlord Buildings Insurance

Buildings have slightly different risks to a residential emergency cover, so the policy is tailored to meet these specific risks. Whether your property is used for offices, retail, industrial, leisure, beauty, storage, unoccupied or mixed-use, we can find the right cover to suit.

General cover can include damage to buildings, landlords’ contents, property owners’ liability, employers’ liability, and business interruption cover.

Loss of Rental Income Insurance

Loss of rent is payable to the landlord when the property is damaged from an insured peril, i.e. fire and deemed uninhabitable, (usually where the bathroom or kitchen cannot be used) and the tenant will need to move out through a loss of rental income policy.

The landlord can claim the same rental income they would have received from the tenant through rent guarantee, from the date of the loss up to when the works are complete. Alternative accommodation can be used to house your tenant into a similar property for the duration of the works.

The tenant would still pay you to rent so that you don’t miss out on the rental income. You cannot usually claim both losses of rent and alternative accommodation, so landlords usually opt for the loss of rent cover.

It is also important to make sure you have selected the correct “Maximum Indemnity Limit” this is the maximum amount of time your insurer will pay your loss of rental income following an insured peril occurring. Typically insurers offer 12, 24 and 36 month indemnity limits and it is important to select the correct maximum indemnity limit to make sure your rental income is protected while the insurer is looking to settle your property claim.

Landlord Liability

Covers against claims made against the owner for any injury/damage to Third Parties arising out of alleged defects in the property or maintenance thereof.

Buildings and Contents

If you have a tenancy within a building on a commercial property, you will need to get contents insurance to cover your personal belongings since the buildings insurance will only cover any specified damages to the building itself, which can go so far as to include any kitchens or bathrooms and malfunctions within those types of rooms.

Accidental Damage

Accidental damage insurance covers many types of accidents that affect either the structure of the building or the contents inside that you oversee. This emergency cover is a great idea if you encounter a problem where a tenant or renting business owner damages your property and disputes their negligence.

Legal Expenses Insurance

Legal expenses insurance can provide emergency cover for legal fees such as court costs or eviction filing costs, in addition to any other legal fees that may be related to tenant issues.

Is landlord insurance a legal requirement?

It is not a legal requirement, but it is usually a requirement of the lease that your tenant has with you. As the owner and landlord, you have an obligation to insure the property against specific risks (damage) detailed in the lease, and a breach of this could cost you a lot of money.

You would be liable for any third-party compensation claims related to property damage or injury through your negligence.

If you have a mortgage on the property then your lender may stipulate that you have this insurance in place.

Why do you need landlords insurance?

In all honesty, and legally speaking, you don’t need landlord insurance but you should have it. If you’re fortunate enough to have surplus cash to cover all damages or a total loss and the time and expertise to sort a claim, then you probably don’t need any type of landlord insurance.

But if like most people, you would prefer that a claim didn’t directly hit your bottom line and could do without the stress or time commitment of sorting a claim, this policy is worth every penny.

Some mortgage lenders may stipulate that you must have this insurance.

That aside, you have most likely invested a lot of money on your property and will naturally expect a return on your investment one day.

Protect your assets and retirement fund with the right level of insurance cover.

What does landlord buildings insurance cover?

  • Buildings: Cover for physical or accidental damage.
  • Contents: If you have any contents within the property i.e. carpets, curtains, white goods.
  • Loss of rent and/or alternative accommodation: If the tenants could not stay in the property due to an insured peril occurring.
  • Accidental damage
  • Malicious damage: Including caused by tenants.
  • Property owner’s liability: Cover if your tenants or visitors are injured as a result of your negligence.
  • Employers Liability: If you employ a maintenance person to deal with your properties.
  • Legal Expenses: If you have to defend yourself against legal action.
  • Insured perils: Including escape of water, flood, fire, storm, subsidence, impact, lightning, explosion, or burst pipes
  • Inflation protection
  • Trace and access of leaks: The cost incurred to find the leak and put right the damage.
  • Terrorism

Do landlords need contents insurance?

In the case of residential lets, it is the responsibility of the tenant to arrange appropriate contents insurance for their own possessions

However, if the house or flat is let furnished, then the Landlord may wish to insure against loss or damage to their own contents – including malicious damage by tenants.

Landlord Contents can often be included as an additional section of cover on the main Buildings or Landlords Insurance Policy

It is important to note that carpets will be the responsibility of the landlord.

Landlord insurance for multiple properties

If you have multiple properties, especially multiple properties with a range of different uses regarding tenants or business, it may be a good idea to consider a multiple properties landlord insurance plan.

Landlord buildings and types of business arrangements can be a whirlwind to keep track of, and streamlined insurance policies like this can cover the cost associated with multiple different scenarios without the multiple loopholes seen with having multiple policies.

What conditions or exclusions do I need to know about?

Insurance covers only certain authorised and regulated stipulations as laid out within an individual policy.

For example, fire or flood damage may be the only types of damage covered for rental properties, and the ability to make a claim for some other accident will be excluded.

Most landlord insurance policies related to buildings insurance or buildings and contents insurance are standard and simple to understand, but there can be some exclusions pertaining to a certain policy that will not cover damage caused by maintenance repairs as an example.

Always consult with an insurance broker to better understand your needs and to find perfect policies tailored for you based on your particulars.

Do tenants need buildings insurance?

The simple answer is no – tenants do not need buildings insurance as the property should be insured by the freeholder.

In the case of blocks of flats, this may be arranged via the Managing Agent or Residents Management Association

However, in the case of commercial tenancies, any improvements carried out to the Building by the leaseholder or tenant (such as flooring, lighting, partitioning, etc) – known as Tenants Improvements – will need to be insured under the leaseholder/tenant’s commercial insurance Policy. This may also include fixtures and fittings installed by the tenant or leaseholder.

Can tenants insure a landlord’s building?

No, this is not correct. Tenants cannot insure their landlords building as the tenant does not have an insurable interest.

Can I insure more than one property on the same policy?

Yes, many Insurance Policies can accommodate multiple properties on the same Policy – which may also be more cost-effective than arranging individual policies.

I own a block of flats, do I need landlord insurance?

If you own a block of flats that you are renting, it is a good idea to have landlord insurance to cover any issues that may arise concerning the building.

Apart from that, having something like renter guarantee insurance is also a good idea to protect your tenancy agreement in your favor if a tenant defaults on the lease.

Additionally, it is also a good idea to have contents insurance to cover your personal belongings since the building’s insurance will only cover any specified damages to the building itself, which can go so far as to include any kitchens or bathrooms and malfunctions within those types of rooms.

Can I get landlord insurance for an HMO?

HMOs or buy-to-let properties are best served by having a specially-tailored insurance policy for the landlord since there are many different financial and social regulations that come with running an HMO.

An HMO insurance purview is different and distinct from regular landlord insurance, and we can certainly help you find the best HMO plan that meets your specific needs.

What type of landlord insurance do I need for short-term lets?

This all depends on the length of time you will be letting the space and rather or not you feel that insurance is worth the time if the space will only be limited for a short period of time.

There are special plans available for those who choose to do short-term lets, and an insurance broker can help you find the perfect plan for anything from a flat or just simply a room you wish to let without the need for insuring multiple parts of a building or contents within the room.

How Glowsure Can Help

At Glowsure Insurance Brokers, we strive to ensure that landlords have all of their insurance needs met with friendly and superior service. We are proud to have established a business that puts customers front and centre, and if something is not right, we fix it.

Being a close team makes us agile and able to respond quickly to a client’s needs. If you are needing landlord insurance or, if you just have some questions you would like answered, please feel free to contact us today at 01730 239387 or fill out our contact form for a free quote with no service charge.

Picture of Rebecca Haynes
Rebecca Haynes
Rebecca is the Operations Manager at Glowsure and a self confessed insurance nerd. She helps businesses and landlords to retain income and continue trading in the event of a claim.
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