Types of landlord insurance: a simple guide

Understanding the basics of landlord insurance 

If you own one or more rental properties, it’s important to protect your investment with suitable landlord insurance. Standard home or building insurance isn’t sufficient if you’re renting out, and it would almost certainly be void if you needed to make a claim. 

‘Landlord insurance’ is an umbrella term that refers to a range of policies. While landlords can take out a single policy providing cover for just the building and fixed contents, many opt for a comprehensive package of cover that protects everything, from the structure of their rental property to malicious damage by tenants or their failure to pay rent.  

While there’s no legal requirement for landlords to take out property insurance (although many mortgage lenders will insist on landlord building insurance, and those with employees must have employers’ liability cover), it makes sense to insure your investment. Renting out a property produces risks that a homeowner won’t encounter, and if something goes wrong when you don’t have valid cover, you could end up having to pay the bill yourself.   

Core types of landlord insurance cover 

There are three core types of cover that we’d recommend to landlords as a minimum: 

• Landlord building insurance. This covers the structure of rental properties against damage from events like fire, flood, storm, and vandalism.   

• Landlord liability insurance. This provides protection against personal injury claims and damage to possessions made by tenants, guests, visitors to the property, and individuals you employ to work on the property. 

• Landlord contents insurance. You should consider this if you have possessions in the property, such as furniture, appliances, or carpets. This type of insurance will cover damage to possessions, although tenants will need their own cover to protect their own belongings.  

Additional landlord insurance options to consider 

In addition to the core cover, your circumstances may require other types of protection, including: 

• Rent guarantee insurance. Even reliable and trusted tenants can run into financial difficulties. If they stop paying their rent, you lose income and could face the hassle of eviction and repossessing the property. Rent guarantee insurance provides you with income if tenants stop paying rent and legal assistance for reclaiming possession of the property. Policies also pay your rental income while the property is empty and you’re looking for new tenants. 

• Landlord legal expenses insurance. Most rent guarantee insurance policies will include legal expenses cover as standard. You can also purchase this as a standalone policy, covering your legal expenses in a wider range of situations, including eviction, repair and renovation disputes, removal of squatters, rent recovery, and even HMRC tax investigations. Policies from Alan Boswell Group also give you access to a 24/7 legal advice helpline. 

• Landlord home emergency cover. This policy assists in emergencies, such as heating breakdowns, utility or plumbing failures, storm damage, or infestations that may occur at one of your rental properties. Policies can also cover part (or all) of alternative accommodation costs for tenants if the property is uninhabitable, which you may be responsible for providing as part of your tenancy agreement. 

• Excess protection insurance. This is a supplementary cover that accompanies your landlord building insurance, covering the cost of the policy’s excess charge, helping you to minimise the financial impact in the event of a claim. 

What insurance is best for landlords? 

The best insurance for landlords is a policy that combines all the necessary covers each property owner needs. For example, landlord building insurance from Alan Boswell Group can be extended to include a wide range of useful covers, such as property owners’ liability cover, unoccupied property cover (for when a property is between tenants or up for sale), malicious damage by tenants, and rent guarantee insurance.  

For landlords who rent out their properties as holiday lets, for commercial use, serviced accommodation, HMOs (houses in multiple occupation), or for portfolios of properties, they can opt for specialist cover tailored to their specific requirements. Adaptable packages of cover include the following: 

• Holiday home insurance. This is insurance for a second home, whether you use it occasionally or let it out commercially to holidaymakers. It covers your building and contents, also providing property owners’ liability for accidents involving guests or visitors.  

• Airbnb landlord insurance. Comprehensive cover designed specifically for people who rent out Airbnb accommodation. In addition to covering buildings, contents, and public liability, it also includes employers’ liability insurance and loss of income cover should the property become uninhabitable due to damage to the building or contents. 

• Serviced accommodation insurance. This cover offers the ultimate flexibility, allowing property owners to switch between different kinds of let during a year without changing their policy. For example, you could let out the property as an Airbnb, a serviced apartment, a ‘rent-to-rent’ or a holiday rental within the same policy period. These policies can cover buildings, facilities such as pools and hot tubs, theft or damage by guests, business interruption, contents, accidental damage, pet damage, legal expenses, unoccupancy, plus public and employers’ liability.  

• Multi-property landlord insurance. Designed for landlords with a portfolio of five or more properties. The main advantage is that you have a single policy with the right level of cover for each property, whether commercial, residential, or a combination.  

• Private sector leasing insurance. This policy is for landlords who rent to local authorities via a private sector leasing (PSL) scheme. When joining a PSL scheme, landlords must confirm that they have the necessary insurance. Your existing landlord insurance is unlikely to cover PSL arrangements due to the difference in tenancy type and restrictions on sub-letting.  

• HMO landlord insurance. The risks of letting out a house in multiple occupation (HMO) are significantly higher than for normal tenancies. HMO insurance can be adapted to suit a range of tenancy types, including students and those in receipt of Universal Credit. 

• Commercial landlord insurance. When you rent out commercial property, you face different risks when compared to residential lettings. For this reason, it’s recommended to take out commercial landlord insurance, which provides tailored cover, such as insuring the building, landscaping, property owners’ liability, as well as business interruption cover in the event of major damage to your property, which stops your tenants from paying rent.  

Popular types of insurance cover for landlords 

Rent guarantee insurance explained 

Rent guarantee insurance has become increasingly popular among landlords due to the rise in the cost of living, which has led to more tenants falling into rental arrears, as well as upcoming changes to rental legislation. 

According to a Government survey, 86% of landlords own between one and four properties, with 45% owning one rental property. In many cases, landlords rely on rent to cover the property’s mortgage and upkeep costs, not to mention personal income or savings. So, it can be disastrous when tenants fail to pay their rent.  

Rent guarantee insurance provides you with peace of mind at a relatively small cost per tenancy, covering the rental income your tenants have failed to pay, as well as the cost of evicting them so you can find new tenants. Policies from Alan Boswell Group cover: 

• Rental income cover of up to £2,500 per month for up to 15 months, with up to three months’ rental cover after eviction at 75% rent (to cover the period until you find a new tenant). 

• Legal expenses cover. Our solicitors will help you regain possession of your property, with cover of up to £100,000 in legal expenses. This covers everything from issuing eviction notices to bailiff costs and lock replacement.  

• 24/7 landlord legal advice helpline. Access to the helpline includes assistance with a wide range of legal issues, including tenancy issues, tax, and health and safety investigations.  

For a policy to be valid, the tenants will need to pass tenant referencing checks. Additionally, you’ll need to supply a legal tenancy agreement and ensure tenants have been issued with all documents required by law, including a Gas Safety Certificate and EPC rating.  

Landlord liability insurance explained 

As a landlord, you are liable for anything at your property that you own or have a financial interest in. This includes the building itself, the land it stands on, fixtures and fittings, any furnishings you provide, boiler maintenance, gas safety, and smoke alarms.  

Landlord liability insurance covers you for any personal injury or property damage claims made by tenants, guests, or people employed to work on your property. For example, if someone seriously hurt themselves by tripping on a loose floorboard, or a leaky pipe damages tenants’ belongings, they could hold you liable. Policies from Alan Boswell Group provide up to £5m of cover for these types of claims. 

For complete peace of mind, we also recommend landlord legal expenses insurance. This covers your legal costs in a broader range of situations, including tenant disputes, evictions, and property damage claims. 

Factors affecting the cost of landlord insurance 

There are lots of factors that influence the price of landlord insurance policies, including: 

• Property location. Properties in areas with higher crime rates, a greater flood risk, or an increased likelihood of subsidence generally cost more to insure than those in lower-risk areas.  

• Property type. The type of property you own will affect your premium. Different types and sizes of flats and houses have their own risk profiles. Older houses often need more expensive repairs, which increases the premium.  

• Cover limits. A higher sum insured will often equate to a higher premium. The sum insured should be based on the rebuild value of your property, so listed buildings, for example, will attract a higher sum insured due to the skilled tradespeople required to repair or rebuild the property. 

• Excess. Choosing a higher excess can lower your premium, but be careful to ensure the excess is affordable should you need to make a claim. 

• Claims history. The fewer claims you’ve made in the past, the lower your premium is likely to be. 

• Tenant type. Insurers assess risk depending on the type of tenant. Generally, professionals and families are considered lower risk and can attract lower premiums.  

• Property occupancy. Policies typically cover you for a certain number of days your property can be empty, generally 30 to 90 days, depending on the policy. If your property is vacant between tenancies for longer than this, you may need to change to an unoccupied property policy, which attracts a higher premium due to the differing nature of claims when a property is unoccupied.  

The best way to get a premium that is suitable for your property and level of cover is to work with a specialist landlord insurance broker, such as Alan Boswell Group, to tailor your insurance to your needs.  

Tips for getting the best landlord insurance cover 

To get the best landlord insurance cover, be sure to discuss your specific needs with your provider. They will be able to talk you through options, including the following: 

• Accurately assessing the value of the property and its contents. Make sure you have an up-to-date valuation for the rebuild cost of your property and the replacement cost from new of any furniture or fittings. Underestimating these figures can leave you underinsured and out of pocket if you need to make a claim, while overestimating could lead to higher premiums. The BCIS rebuild cost calculator can help you calculate rebuild values, or for complete peace of mind, consider appointing a qualified valuer.  

• Considering a higher excess to lower the premium. This is a good option if you are willing to absorb minor costs yourself, as not making a claim will help keep your premiums low. 

• Maintaining the property to prevent damage from wear and tear. Ensure tenants feel comfortable reporting issues to you and ensure the property is well-maintained. 

• Disclose all relevant information to the insurer to avoid invalidating the policy. Always be honest and transparent with your insurer – whether it's about the type of tenant, property use, or claims history. Failure to disclose important details could invalidate your policy, leaving you unprotected when you need to make a claim. 

If you rent out properties, there are policies available to cover everything from your buildings and contents to your liability as a landlord, rent protection, and legal expenses. There are also specialist policies for people renting out holiday homes, Airbnbs, serviced accommodation, multiple properties, commercial premises, and more.  

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