What landlord insurance do you need?

A good landlord does more than find a tenant and collect the rent. You are running a small property business, and like any business you need the right protection when things go wrong. Landlord insurance exists for that purpose. It is not the same as a standard home policy, and buying the wrong cover can leave you financially exposed just when you need help most.

This August article explains what landlord insurance is, when you need it, the covers to consider, how to judge policy quality, and the pitfalls that often catch people out. It is written for landlords in England and Wales, and it aims to help you choose protection that fits your property, tenancy type and appetite for risk.

What is landlord insurance?

Landlord insurance is a specialist package designed for properties that are let to paying tenants. It can also be know as buy-to-let insurance or let property insurance. Insurers view a tenanted property as a different risk from an owner-occupied home. There is more wear and tear, you are not present to spot small issues early, and liability risks are higher. Because of that, most ordinary home insurance policies exclude cover when the property is let. If you let your property on a standard home policy, you may invalidate the insurance.

Landlord insurance is flexible. You can buy a basic policy to protect the building against major perils, or a more comprehensive bundle that also covers your legal liabilities, loss of rent, malicious damage, accidental damage and various extras, such as legal expenses or home emergency.

Do you need landlord insurance?

There is no general law that forces private landlords to hold a landlord policy, but three common situations make it essential in practice:

1. Your mortgage requires it - Most buy-to-let lenders insist on buildings insurance as a condition of the loan, with the sum insured set to the full rebuild cost.

2. Your lease requires it - In leasehold flats, the freeholder or managing agent usually arranges buildings cover for the whole block and recharges it via the service charge. You will still need appropriate contents and liability protection for what you own inside the flat and the tenancy itself.

3. You want to protect your income and assets - Even without a mortgage, a single major escape of water or fire could wipe out years of rental profit. A well structured policy is a business continuity tool.

Core covers to understand

Buildings insurance

This is the foundation. It covers the physical structure, like the walls, roof, floors, plus fixtures like fitted kitchens and bathrooms against insured events such as fire, storm, flood, subsidence, escape of water, and theft following forcible entry. Pay close attention to:

• Sum insured (called reinstatement value) - This should be the full cost to rebuild the property from the ground up, including professional fees and debris removal, not the market value. Surveyors and online calculators can help you set an appropriate figure. Under-insure and you may face “average,” where the insurer reduces any payout in proportion to the shortfall.

• Accidental damage - Often optional. This covers one-off mishaps, such as drilling through a pipe or smashing a worktop.

• Subsidence - Sometimes comes with a higher excess and extra conditions. If the property has a history of movement, declare it fully and expect a specialist underwriter.

Landlord contents insurance

This protects your furnishings and appliances that are not part of the building. Items such as carpets, curtains, sofas, beds, white goods you supply. Tenants’ belongings are not covered. They should take their own contents policy. If you let unfurnished, you may still want limited contents cover for items you own, such as curtains and carpets.

Property owner’s liability, called public liability

If a tenant or visitor is injured at the property and alleges your negligence (e.g. a loose stair carpet causes a fall) this cover handles defence costs and compensation up to the policy limit. Commonly it is £2m or £5m. It is a critical part of any landlord package.

Loss of rent vs. rent guarantee, know the difference

These two are often confused:

• Loss of rent (following insured damage) - If a fire or escape of water makes the property uninhabitable, this cover replaces the rental income you lose while repairs are completed, or pays for alternative accommodation for the tenant if the tenancy agreement requires it. It only responds when physical damage insured by the policy has occurred.

• Rent guarantee insurance (tenant default) - A separate product (sometimes an add-on) that covers unpaid rent when a tenant falls into arrears without any physical damage. It usually requires robust tenant referencing and may include legal costs for possession proceedings. Do not assume your buildings policy automatically includes it.

Malicious damage and theft by tenants

Some policies include malicious damage by tenants, others exclude it or offer it as an optional extension. Always read the definitions. Malicious damage is deliberate, whereas accidental damage is not. Theft by tenants is often excluded unless there are signs of forcible entry, so check wording carefully if you provide valuable furnishings.

Legal expenses

This covers solicitors’ fees and court costs for tenancy disputes, for example possession claims, eviction following anti-social behaviour, or pursuing a tenant for property damage. Always try to handle tenancy and tenancy deposit disputes fairly to avoid claiming. If you do have to claim, quality policies provide a legal advice helpline and clear cover triggers. Do not rely on this to pay for every disagreement. Most wordings have strict conditions.

Employers’ liability, if you hire property management staff

If you employ someone directly for the property you may need employers’ liability insurance by law. Many landlords don't employ property management staff directly, relying instead on contractors who carry their own insurance. If in doubt, ask your broker.

Home emergency

A convenience add-on that gives tenants a 24/7 helpline and call-out for urgent issues. An example of this might be no heating, burst pipes or a broken lock on the front door. This is not a maintenance contract, instead it handles emergencies to prevent further damage or risk to the tenants.

Tenancy and property types that change the risk

Insurers price and design cover around the tenants who occupy the property and how it is used. Declare the correct tenancy type or you risk a declined claim.

• Single-family lets (AST) - Mainstream risk with broad market choice.

• Houses in Multiple Occupation (HMO) - Different liability profile and higher wear and tear. You will need an HMO-appropriate policy and to meet licensing and safety obligations, such as fire doors and alarms.

• Students - Often treated like HMOs if let by the room. Check term time unoccupancy conditions.

• Professional sharers - Similar to HMOs if each room is on a separate agreement.

• Short-term lets and holiday lets - You need a specific short-let or serviced-accommodation policy. Standard landlord insurance generally excludes nightly stays and transient guests.

• Social tenants, DSS, supported housing - Specialist markets exist. Full disclosure is essential. See our article on housing associations.

• Unoccupied periods - Most landlord policies restrict cover when a property is empty for more than a set period, this is often 30–60 days. During voids, you may need an unoccupied property extension, regular inspections, and to maintain minimum heating or water-system drain-down.

How much cover do you need?

Setting the buildings sum insured

Aim for the rebuild cost, not the price you paid or the current market value. Include demolition, professional fees and external works. If the property is non-standard construction, listed, or has bespoke features, consider a professional assessment. Review the sum insured annually, and look for index-linking in the policy to keep pace with inflation.

Choosing a loss-of-rent limit and period

Pick a monthly rent figure and a maximum indemnity period long enough to cover a worst-case rebuild. For serious fires or major structural works, 12 months can be tight; 24 or even 36 months is more prudent for complex buildings or blocks awaiting planning and contractor lead times.

Contents limit

Match the value of what you supply. Inventory everything you own and keep receipts or photos where practical. This should not include what the tenant brings to the property.

Liability limit

£2m is common, but many landlords choose £5m for peace of mind, particularly in HMOs or blocks with communal areas.

What affects the premium?

• Property features - Construction type, roof material, age, listed status, flood or subsidence history.

• Location - Crime rates and flood mapping influence theft and water risks.

• Tenancy profile - HMOs, students, or short-lets usually cost more than a single-family AST.

• Claims history - Previous escapes of water or subsidence will attract loadings and conditions.

• Security and protections - Locks, alarms, leak detection, fire doors, hard-wired smoke/heat alarms can reduce risk.

• Excesses - Higher voluntary excesses reduce the premium, but choose a level you can genuinely absorb.

Conditions, warranties and exclusions you must read

Insurance is a contract. If you breach a condition, the insurer may reduce or refuse a claim. Look out for:

• Inspection or unoccupancy conditions - During voids, you may need weekly checks, to turn off water at the stopcock, or maintain minimum heating to prepare your rental property for winter.

• Security requirements - Approved locks on doors and windows may be required; some wordings specify British Standards.

• Maintenance and wear-and-tear exclusions - Insurance is for sudden, unforeseen events, not gradual deterioration.

• Flat roofs - Often need periodic inspections and maintenance records.

• Water leak mitigation - Some policies require timely repairs or the installation of leak detection after repeat claims.

• Tenancy referencing for rent guarantee - Miss a step or key task and the guarantee may not apply.

Keep copies of inventories, tenancy agreements, gas and electrical safety certificates, and inspection notes. Good housekeeping supports smoother claims. Use August to keep all documents in one place and get suggested reminders.

How to prepare claims and what to expect

1. Make the property safe - Stop the leak, isolate electrics if necessary, and prevent further damage.

2. Notify your insurer or broker promptly - Late notification can complicate matters.

3. Document everything- Photos, videos, inventory check-in/out, contractor quotes, and receipts.

4. Co-operate with loss adjusters - For larger claims, an adjuster will assess the damage and agree a scope of works.

5. Track time for loss-of-rent claims - Keep a clear rent schedule and the tenancy agreement, August provides clear rent tracking.

6. Consider your excess and increased future premiums - For minor damage, you might prefer to self-fund to protect your claims history. Ask your broker for a view.

Leasehold flats, who insures what?

In most blocks the freeholder arranges buildings insurance for the structure, paid via service charge. As the leaseholder-landlord, you still need:

• Landlord contents for your fixtures not covered by the block policy, often carpets and internal fittings, depending on the lease wording.

• Property owner’s liability for your demised premises.

• Loss of rent if the block policy does not already cover it adequately for your flat.

• Legal expenses for tenancy matters.

Always read the block policy summary and the lease definitions of “buildings” and “landlord’s fixtures and fittings” to avoid gaps or duplication.

Short term lets and serviced accommodation, there are different rules

Nightly or short term rentals, cleaning teams, and key-safe access change the risk profile. You will need:

• A holiday-let or serviced-accommodation policy that covers guest turnover and higher liability exposure.

• Employer’s or public liability that extends to cleaners and maintenance contractors where applicable.

• Loss of income based on average nightly rates and expected occupancy, not just monthly AST rent.

Standard landlord policies rarely cover this model, do not try to squeeze it in. We ask is short term letting still profitable in the UK.

Common mistakes landlords make

• Using a home policy for a let property - It is usually an exclusion.

• Under-insuring the rebuild cost - Market value is not the same as reinstatement value.

• Confusing loss of rent with rent guarantee - They address different problems.

• Ignoring policy conditions - A simple missed inspection during a void can derail a claim.

• Forgetting alternative accommodation obligations - If your tenancy agreement promises it, make sure your insurance mirrors that promise.

• Not updating the insurer after a change - Tenancy type, occupancy, building works, or a major refurbishment all need disclosure.

• Letting HMO rooms under a single-family policy - Mis-classification voids cover.

How to compare landlord insurance properly

Price matters, but quality matters more when your property is on the line. When you compare quotes:

1. Start with the essentials - Buildings, landlord contents, if needed, property owner’s liability, and loss of rent.

2. Pick a sensible indemnity period for loss of rent - 24 months is often safer for complex properties.

3. Check accidental and malicious damage options - Especially in furnished properties or HMOs.

4. Scrutinise exclusions and excesses. A bargain premium with a high escape-of-water excess or tight unoccupancy conditions may be a false economy.

5. Review service - Claims handling speed, out-of-hours support, and access to approved contractors are worth money.

6. Consider a broker. A specialist broker can navigate niche risks (e.g., listed buildings, subsidence history, student HMOs) and advocate for you at claim time.

Practical steps to buy the right cover

• Gather information - Construction details, year built, flat-roof percentage, flood or subsidence history, tenancy type, occupancy, previous claims, and the rebuild cost.

• Decide on limits and options - Buildings sum insured, contents amount, liability limit, accidental/malicious damage, loss-of-rent period, legal expenses, home emergency.

• Disclose fully - Answer questions honestly and completely. Non-disclosure is a fast route to declined claims.

• Align policy to tenancy agreement - Make sure obligations such as alternative accommodation are mirrored in the insurance.

• Set reminders - Review cover at each renewal, after major works, or if you change the tenancy model.

FAQs

Is landlord insurance tax-deductible?
Insurance premiums for a rental business are usually an allowable expense when calculating taxable profits. Speak to your accountant for advice on your circumstances.

Can I switch mid-tenancy?
Yes. You can change insurer at renewal or mid-term if needed, although cancelling early may incur fees. Avoid gaps in cover.

What if my property is empty between tenancies?
Advise your insurer. Many policies reduce cover after 30–60 days of unoccupancy and require weekly checks, water shut-off or minimum heating. You may need an unoccupied extension.

Do I need contents cover if I let unfurnished?
Often yes, at least for what you still own (e.g., carpets and curtains). It is inexpensive and helps after leaks or fires.

Will insurance cover routine repairs?
No. Insurance covers sudden, unforeseen events, not maintenance or wear and tear. Budget for upkeep separately.

Is a tenancy deposit a substitute for insurance?
No. Deposits are capped and intended for cleaning, minor damage and arrears. They will not cover a major escape of water or a long rebuild.

The bottom line

Your rental property is an asset and an income stream. Landlord insurance exists to protect both, but only if the policy matches how you let, how your building is constructed, and how much risk you are prepared to carry yourself. Focus on correct rebuild sums, the right liability limit, and a robust loss-of-rent period. Declare the true occupancy and read the conditions that apply during voids. If you run HMOs, short-lets or more complex setups, seek a specialist policy or a broker who knows the sector.

Choose thoughtfully now, and the next time something goes wrong, your insurance will function as intended. A quiet, competent partner that keeps your property business moving.

Disclaimer: This article is a guide and not intended to be relied upon as legal or professional advice, or as a substitute for it. August does not accept any liability for any errors, omissions or misstatements contained in this article. Always speak to a suitably qualified professional if you require specific advice or information.