Landlord Insurance Explained

Standard home insurance is written for the owner who lives in the property. Letting changes the risk, and most policies will refuse a claim if the insurer was never told about it. Landlord cover is built around that risk, and it comes in parts you can choose separately rather than one take-it-or-leave-it package.

The three core pieces

Buildings cover pays to rebuild the structure after fire, flood, storm or subsidence, and it usually includes fixtures such as kitchens and bathrooms. Contents cover protects items you own and leave in the property, such as white goods and furniture. Liability cover responds if a tenant, a visitor or a contractor is injured or their belongings are damaged and you are held responsible.

The rebuilding figure is not the market value of the home. It is what it would cost to rebuild from the ground, which can differ sharply from the sale price, and underinsuring on that number leaves you paying the difference on any major claim.

Contents cover is often misread in a letting. It protects your belongings left at the property, not the tenant's, so anyone who wants their own furniture and electronics covered needs a separate tenants policy. Where the home is let furnished, list the items and their condition in the inventory so a future claim can be quantified without argument.

Why a standard home policy will not do

Policies for owner-occupiers commonly exclude loss of rent, damage caused by tenants and liability arising from letting. If you move out and rent the home without telling the insurer, a claim can be refused even for a fire that has nothing to do with the tenancy, and the argument happens at the worst possible moment.

Mortgage lenders usually require notification as well. Most residential mortgages do not permit letting on the original terms, so letting without consent can put the loan in breach. Ask for written consent before you advertise the property, not after a tenant has moved in.

Loss of rent and empty periods

Loss of rent cover pays the rent while the property cannot be lived in after an insured event such as a fire or a flood. Check how many months it covers, whether it pays the rent you actually charge or a capped figure, and whether it starts from the date of the damage or after a waiting period.

If the property will stand empty between tenancies or during works, tell the insurer. Unoccupied cover carries its own conditions, usually a limit on how long the home may be left, and sometimes requirements to drain the water or have someone visit regularly.

Matching cover to the tenancy

Houses in multiple occupation, student lets, holiday lets and short-term lets are priced differently because the risk is different. So are properties with a history of flooding, subsidence or a thatched roof. Disclose everything material, including previous claims, even ones you consider minor and settled without any argument.

If you use an agent, confirm who arranges the cover and who is named on it. An agent's block policy may sit alongside yours or it may leave gaps in what you assumed was covered, and the gap only becomes visible when you claim.

• Accidental damage - Extends cover to mishaps that are not deliberate acts.
• Legal expenses - Contributes to the cost of pursuing or defending a claim.
• Rent guarantee - Pays the rent when the tenant stops paying.
• Emergency cover - Pays for call-outs to leaks and loss of heating.

When you need to claim

Report it promptly, keep damaged items until the insurer says you can throw them away, and photograph everything before anything is moved. Keep your own copy of the tenancy and any messages with the tenant, because the insurer will want to know how the damage happened and when it was first noticed.

A refused claim is usually about disclosure rather than about the damage itself. If you were unsure whether something should be mentioned, mention it and let the insurer decide; a detail you volunteered cannot later be used to void the policy.

Keep the correspondence together in one place. Claims take months to settle and the person handling your file will change, so a folder with the incident notes, photographs, quotes and the tenant's messages saves you rebuilding the story from memory.

Reviewing cover and comparing policies

Cover should be checked at every renewal and whenever the property changes. A new boiler, a loft conversion, a garden office or a move from a single let to sharers all alter what needs insuring, and a policy written for the old arrangement may no longer fit the home you now own. Tell the insurer before any planned building work starts, not after.

Compare like with like when you look at alternatives. A lower premium often sits on a bigger excess, a lower rebuild figure or a shorter list of insured events, and the gap only appears when you claim. Check the clause about how long the property may be left empty, because an empty period clause is the condition landlords break without noticing.