What Landlord’s Insurance Do I need? An In-Depth Guide

Wondering what landlord’s insurance do I need? You’re not alone.

There are several types, from contents insurance to buildings insurance, landlord’s public liability and rental guarantee cover. And knowing which ones you need (and which ones are nice to have) can be tricky. 

But the good news is you don’t have to be an expert to get landlords insurance that’s right for you. We’re simplifying things with this in-depth guide to the different types of landlord’s insurance, and when you might need them.

What is landlord’s insurance?

Landlord insurance is a “catch-all” term for lots of different types of insurance. These policies help protect you, your income and your rental property.

But do landlords need different insurance? In a word, yes.

Standard home insurance policies won’t cover rental activities, so some form of residential landlord insurance is a must. 

These landlord-specific policies include lots of “standard” risks covered by ordinary home insurance (such as flooding and fire). You can also get protection against things like loss of rental income, unexpected legal expenses and tenant damage.

If you’ve got a mortgage on your property, lenders normally ask for a specialist policy as part of your mortgage deal too.

We’ve already written an introduction to what is a landlord’s insurance policy, so have a read. Once you’re feeling confident about your landlord’s insurance options — it’s time to talk about what types you might need.

Is landlord insurance mandatory?

In short, no.

There is no legal obligation for a landlord to take out landlord’s insurance.

Despite this, most buy-to-let mortgages have conditions regarding landlord’s insurance policies. This means if you rent out your property without insurance in place, you’ll break your mortgage terms.

If you’ve got a regular mortgage and decide to rent your home, you’ll also need written permission from your mortgage provider before you accept any tenants. They’ll normally stipulate some form of buy-to-let insurance.

Some local authorities also have rules saying residential landlords need extra cover for things like personal injury claims. If you’re unsure, check with your local council in the first instance.

Even if you already own your property outright, being a landlord can be risky business. What if a tenant gets hurt on your property? This could mean you’re faced with substantial legal costs not covered by normal home insurance policies.

In the event your property is uninhabitable as a result of flood, fire or structural damage (to name just a few hazards), your tenants will have to move into alternative accommodation. If you don’t have rental income (in addition to substantial building and repair costs), will you be able to make your mortgage payments? What about repairing fixtures and fittings? 

A conventional home insurance policy wouldn’t help here… so can you take the risk?

Landlord’s insurance policies aren’t compulsory. This doesn’t mean you won’t need them, though. 

So, what are the different types and when do they help?

What kind of landlord insurance do I need?

To help you decide on the right cover for you, we’ve broken the different types of landlord insurance down into three main categories.

First, we’ll look at the landlord insurance policies that are usually compulsory as part of buy-to-let mortgages (your “must haves”). Second, we’ll cover the various types of optional extras (these are your “should haves”). And finally, we’ll look at the extra protection offering complete peace of mind. These are “nice to have” policies providing a full range of cover.

1. Landlord’s Insurance: Essential “Must Haves”

Landlord Buildings Insurance

This is the one type of insurance your mortgage lender will definitely require. It covers the rebuilding cost if the structure of your property is damaged.

Landlord buildings insurance usually covers risks like fires, floods, vandalism, lightning and storms, as well as subsidence or landslides. It also covers damage from things like burst pipes, and impact from falling trees, vehicles, aerials and masts. 

Talk to your insurance provider about what their building insurance covers, and they’ll provide in-depth policy documents.

Do I need landlord building insurance?

If you’re renting a property, landlord building insurance is usually a must-have. It means you’re protected in the worst-case scenario that substantial structural repairs (or even complete demolition and rebuilding) are needed.

Do I need landlord building insurance for a flat?

If you own a leasehold flat, the freeholder might insure the whole building. Even so, if you don’t have insurance for your individual flat or apartment, you might not be protected from certain types of damage (let alone additional concerns such as tenant injury or damage to contents). For this reason, it’s always worth having your own insurance covering your buy-to-let property.

2. Landlords Insurance: Advisable “Should Haves”

Landlords Contents Cover

You’ll often find insurers provide landlords with buildings and contents insurance under one policy package. If not, contents cover is a common add-on to a building’s insurance policy. 

There are different options (depending on whether you’re renting a furnished or unfurnished property), but this type of cover protects you in case fixtures, and fittings are damaged.

Landlord contents insurance usually covers things like curtains, carpets, electrical equipment and furniture such as sofas and dining tables (for example). 

It’s important to note this only covers your possessions, though. Any furniture belonging to your tenants won’t be covered. So if they’d like protection, they’ll need a separate policy.

Do I need landlord’s contents insurance?

Contents insurance is advisable for most landlords. It’s important even if you’re renting out an unfurnished or part-furnished property, as accidental damage to things like carpets and curtains is common.

Do I need landlord insurance if renting to family members?

For anyone considering building and contents insurance, this is a common question. If you’re renting to a friend or immediate family member, do you really need insurance?

Well, this is up to you. But consider the implications if your friend accidentally damages your property, furniture and fittings beyond repair. It doesn’t matter whether you know them or not, you’ll still have to find the funds to repair this. If you can’t easily cover these costs, additional protection is sensible.

Landlord Liability Insurance

Sometimes also known as “property owners’ liability insurance” (or just “public liability cover”), this is another should-have policy that protects landlords if a tenant (or visitor) suffers injury, illness or death on your property.

These kinds of policies offer high levels of cover — typically stretching to £1 million or even £5 million. While this might not seem necessary at first, bear in mind how quickly legal action and costs can escalate. This is especially the case if you have to pay a compensation claim.

Do I need landlord liability insurance?

It’s a landlord’s responsibility to make sure their properties are maintained in good condition and are safe to live in. Even with the best intentions though, mistakes and accidents can happen. 

Even if a tenant trips over a loose carpet, you’re liable for their injuries. So ask yourself, do you have the funds to cover any claims? 

If not (and this is the case for most people), landlord liability insurance offers the right level of cover. It means you won’t get hit with hefty legal fees and compensation claims.

3. Landlords Insurance: Complete Peace of Mind “Nice to Haves”

If you’ve gone for buildings and contents insurance as well as landlord liability cover — you’re protected for a wide range of scenarios. Even so, there are a few situations not covered.

When considering these “complete peace of mind” options, your individual circumstances will dictate what level of cover you need. So do think carefully about whether each policy type would be useful to you.

Here are some optional covers to keep in mind:

Home Emergency Cover: Protecting you and your tenants against the loss of essential services, including the costs of repairs and work. This includes issues like plumbing and electrical problems, as well as lost keys and broken windows.

Loss of Rent and Rental Guarantee Insurance: These are two different types of insurance. Rental guarantee insurance (also known as “tenant default insurance”) protects you from any unpaid rent. “Loss of Rent” cover is slightly different, covering rental income if your property is uninhabitable for a certain amount of time. Is landlord rent insurance worth having? If you rely on rental income to pay your mortgage(s), these policies offer peace of mind.

Malicious Damage: If your contents insurance policy doesn’t cover malicious tenant damage — this gives extra financial protection. Your insurer will payout for purposeful damage to your furniture and fittings (over and above what’s covered by your tenancy agreement deposit).

Landlord Portfolio Insurance: If you rent out more than one property, you can group insurance policies under one plan. This makes arranging your insurance easier (no more multiple renewal dates) and provides better value for money. The savings are largest for property owners with more than five houses or flats, but might not make a big difference for property investors with just a couple of properties.

Legal Expenses Insurance: Your existing “property owners liability cover” might give adequate cover in the case of legal action, but this isn’t always the case. If you’re unsure, talk to your insurer about your level of protection for extra costs associated with compensation claims and legal fees.​​​​

Do I need landlord insurance if I’m renting a room?

If you’re renting a room in your own home, a normal home insurance policy won’t cover this. 

Even if you’re a live-in landlord renting a single room, landlord insurance is still vital. You could be at risk of invalidating your insurance cover (and any mortgage agreements) without it.

Get in touch with your insurance company and mortgage provider in the first instance, to let them know you’re planning to host a lodger. You’ll probably need specialist landlord insurance in place.

To recap: what insurance do landlords need?

If you’re only going to take out one kind of landlord’s insurance, make sure it’s Landlord Buildings Insurance. Should the worst happen and you need to repair or rebuild the structure of your property, you’ll be glad you have it in place. 

But don’t dismiss the other types of landlord insurance we’ve listed above. They could help protect against loss of rental income, unexpected legal expenses, tenant damage, and much more.

If you’re looking for landlord insurance, get in touch with our specialist A-Plan advisors today. 

As well as covering your buildings and contents, we can also arrange legal expenses insurance and rental income protection. Find cover and get a bespoke quote that’s perfectly tailored to your needs.