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Many people in their 50s, 60s and beyond find themselves having to rent out a property unexpectedly, perhaps after inheriting a home, moving in with a new partner, or struggling to sell due to a slow housing market.
If you find yourself an “accidental landlord”, getting to grips with all the rules around renting out a property can feel daunting. One of the most important things to remember is that standard home insurance usually doesn’t cover rental properties. In most cases, properties that are let out to tenants need specialist landlord insurance. Without it, you could find yourself potentially exposed if something goes wrong.
Landlord insurance isn’t simply another expense to add to your list when preparing to rent out a property. Having the right policy can protect your finances, your property, and your peace of mind.
If you’ve recently found yourself renting out a property, here are seven essential landlord insurance tips to help you stay protected.
1. Don’t rely on standard home insurance
A common mistake accidental landlords make is assuming their existing home insurance policy will still apply once tenants move in.
As a general rule, it won’t. Standard policies are designed for owner-occupied homes, not properties that are rented out. If you simply stick with your existing cover and your insurer isn’t informed that tenants are living in the property, any claim you make could be rejected.
That means if there’s a fire, flood, or major damage, you could be left covering the cost of repairs yourself. If you don’t know where to begin finding landlord insurance, you may want to consider using a broker that can compare landlord Insurance quotes from a panel of insurers, saving you the time and hassle of doing it yourself.
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Choose Swinton Business Insurance to help protect against liabilities, property damage and claims. Enjoy a £60 Amazon Gift Card when you purchase a qualifying Landlord Insurance Policy and £20 for Public Liability Insurance. T&Cs apply.
Swinton Insurance is a trading name of Atlanta Insurance Intermediaries Limited. Authorised and Regulated by the Financial Conduct Authority under firm reference number 309599.
2. Make sure both buildings and contents are covered
There are two main types of landlord insurance: buildings cover and contents cover.
- Buildings insurance protects the physical structure of the property, including walls, roof, floors, and permanent fixtures such as kitchens and bathrooms. Lenders usually make it a condition that you must have buildings insurance if you have a buy to let or any other type of mortgage on the property you rent out.
- Contents insurance, as the name suggests, protects items you provide for tenants, such as furniture, appliances, carpets, and curtains. If you’re letting the property unfurnished, you’re unlikely to have much need for contents cover, but it’s still worth thinking about whether there are any items worth protecting. Tenants will need to take out their own contents cover if they want to ensure their possessions are protected, but that is their responsibility not yours.
When choosing how much cover you need, don’t just plump for random numbers as you risk ending up under or over-insured. With buildings cover, you need to focus on how much it would cost to rebuild the property from scratch, rather than its value. If you’re not sure, you can use the Association of British Insurers’ Rebuild Calculator. You have to register, but it’s free to do and the calculator is easy to use.
When considering how much content cover you need, if you’re renting the property furnished, being methodical can really help. Start by going through each room and making a note of all of your possessions. Your home contents may include, for example, things like:
- Kitchen utensils, glasses and jugs, pots and pans, baking trays and so on
- Freestanding kitchen appliances that you own, such as a fridge, freezer, microwave, kettle and toaster
- Other freestanding appliances like washers, tumble dryers, etc.
- Freestanding furniture: lamps, sofas and cushions, tables, chairs, and so on
- Curtains and carpets
- Pictures and ornaments
- Cleaning tools and ironing board
- Garden furniture
- Anything else kept outside, such as a barbecue or plant pots.
3. Consider cover for loss of rent
When choosing a landlord insurance policy, check to see whether it provides ‘loss of rent’ cover. This replaces any rental income that might be lost if the property is damaged and needs repairs, usually for up to 12 months.
For example, if our rental property becomes uninhabitable due to an insured event, such as a fire or flood, your tenants may have to move out while repairs are carried out. Without protection in place, that could mean months without rental income.
Having loss of rent included is especially important if you rely on rent to cover mortgage payments. You may also want to consider rent protection, which covers lost income when tenants default on payments. This is usually available as an add-on and will cover you up to a certain monthly amount for unpaid rent.
4. Check how much protection you have against liability claims
If a tenant is injured while living in your property and claims it was due to poor maintenance or unsafe conditions, you could be held legally responsible.
Landlord liability insurance helps protect you financially if someone makes a claim for injury or damage linked to your rental property. For example, this might apply if your tenant trips on loose flooring, is injured because a banister hasn’t been properly secured, or if a leaking pipe damages their belongings.
As a general rule, most landlord insurance policies provide cover of up to £2m for legal claims and sometimes significantly more, so make sure you’re clear exactly how much protection you have.
5. Is tenant damage included?
Most tenants take good care of the properties they rent, but accidental or deliberate damage can still happen.
Standard landlord insurance usually covers risks such as fire, storms, and floods, but damage caused by tenants isn’t always automatically included, with some providers offering it as an optional extra.
This can cover things like broken windows, damaged fixtures, or stained carpets. Deliberate damage by tenants may require separate cover or higher-level policies, so it’s worth checking the details carefully.
Insurance That Works for Your Business
Landlord and Public Liability Insurance for properties, tenants and trades. Protect your business with flexible options.
Choose Swinton Business Insurance to help protect against liabilities, property damage and claims. Enjoy a £60 Amazon Gift Card when you purchase a qualifying Landlord Insurance Policy and £20 for Public Liability Insurance. T&Cs apply.
Swinton Insurance is a trading name of Atlanta Insurance Intermediaries Limited. Authorised and Regulated by the Financial Conduct Authority under firm reference number 309599.
6. Be aware of empty property limits
Many rental properties have periods when they are unoccupied, perhaps because one set of tenants has left and you haven’t yet found new tenants to move in.
It’s worth being aware that many landlord insurance policies include restrictions if the property is unoccupied for more than 30 or 60 days. After that point, certain types of cover that are normally included in the policy, such as water damage or theft, may be reduced or removed altogether.
This can catch accidental landlords out, so make sure you know where you stand if the property is likely to be unoccupied at any point. Always let your insurer know too, as they might agree to extend your cover or suggest a specialist unoccupied property policy.
7. Review your policy every year
Your circumstances as a landlord may change over time, particularly if you only became one by accident rather than design.
What might have started as a simple plan, perhaps to rent out a former home or inherited property for a couple of years, might gradually evolve. For example, you may decide you want to switch from a short-term tenancy to long-term, and to add furnishings to boost the property’s appeal, or carry out renovations such as a new kitchen or extension. Making these changes can affect the value of the contents you have or the rebuild cost of the property, so it’s important to check your cover is still sufficient.
Reviewing your landlord insurance policy at least once a year also gives you the opportunity to shop around and compare providers. Insurance premiums and policy features can vary widely, and switching insurers could potentially save you money or provide you with greater protection.
A final thought…
It’s easy to feel overwhelmed if you suddenly find yourself a landlord, especially if renting out a property was never part of your plan.
However, making sure you have the right landlord insurance can provide valuable peace of mind that your property and your financial security are protected, whatever the future may hold.