What is landlord insurance?
Landlord insurance is similar to home insurance, but it's specifically designed to cover rental properties.
The three main types of landlord insurance are buildings, contents and liability insurance.
Beyond these, there are various add-ons you may find useful, depending on the type of property you're letting.
You'll usually take out insurance on a property-by-property basis, although portfolio policies are available to landlords who own four or more rented homes and want to insure them all at the same time.
Types of landlord insurance
Buildings insurance covers any damage to the structure of your property, as well as the cost of rebuilding the home if it's irreparably damaged.
You generally won't be able to take out a buy-to-let mortgage without proof of buildings insurance, and most lenders will specify the minimum level of cover you require in their terms and conditions.
If the property is a flat within a block, your buildings insurance will usually be part of a shared block policy, which you'll pay for as part of your service charge. It's worth checking exactly what's covered within this and taking out your own additional policy if you want to cover anything that's not included.
Buildings insurance policies typically offer cover against the following types of damage:
- Theft, vandalism, malicious damage (including by tenants)
- Lightning, storm, earthquake damage (may be limited to the building itself rather than fences etc)
- Burst pipes
- Fire or smoke
- Oil or water Impact caused by accidents
Contents insurance can usually be taken out as a standalone policy or as an add-on to buildings insurance, and the level of contents insurance you'll need depends on whether you're letting a furnished or unfurnished property.
A contents insurance policy will cover the cost of repairing or replacing fixtures and fittings such as carpets, furniture and electrical items if, for example, they're damaged in a flood, and some policies can be extended to cover accidental damage to items.
Landlord contents insurance policies only pay out on items that you've provided in the property. Anything that belongs to your tenants, from everyday belongings to furniture, won't be covered, so tenants should take out their own policy.
Liability insurance covers you if your tenant or a visitor suffers an injury in your property.
Also known as public liability cover, this insurance protects you financially against unforeseen accidents, but shouldn't be considered an excuse to not make the property as safe as possible for your tenants.
Liability insurance policies often have extremely high coverage limits stretching to millions of pounds, which could be necessary if you're held legally responsible for an accident and need to pay compensation.
Rent receivable insurance/tenant default insurance
Rent receivable insurance (otherwise known as tenant default insurance or rent guarantee insurance) protects you if your tenant falls into arrears and - in some cases - during any void periods when the property is empty.
As well as including lost income from missed rent payments, rent guarantee insurance usually includes legal expenses cover, which covers the costs of repossession and eviction proceedings if required.
This insurance can be an asset for landlords who rely on rental income to cover their mortgage payments, but check your contract with your managing agent (if applicable) first, as you may already be covered.
Home emergency cover
Home emergency cover offers round-the-clock cover against loss of essential services in your property.
These policies cover the cost of repairs and should enable you to get services up and running quickly.
Home emergency cover usually offers protection against the following issues:
- Plumbing and heating problems (you may need to pay extra for boiler cover)
- Roofing problems
- Issues with doors and windows
- Drains, pipes and sewer problems
- Electricity problems
- Lost keys
However, past research by Which? has found that home emergency cover isn't always worth buying due to the number of exclusions contained within many policies, so make sure you read the small print before taking out a policy.
Best landlord insurance providers
Finding the right landlord insurance policy can be tricky, so we've analysed the plans on offer from major providers including Aviva, Axa and Direct Line and surveyed more than 700 landlords to gather real customer reviews.
You can find out the results - including overall policy scores and Which? customer scores - in the tables below.
Which? members can log in to see the results of our analysis. If you’re not already a member, take a £1 trial to Which? Money for one month to access this review and enjoy the benefits of a Which? membership.
Landlord insurance: policy scores
To calculate the below policy scores, we rated 83 different aspects of landlord insurance policies, including their coverage of issues such as subsidence and malicious damage.
Note: component scores have been weighted differently in terms of their importance to prospective and current landlords. Component scores represent top-line scores before they are weighted. Weightings are as follows: buildings 40%, contents 20%, liability 30%, rent receivable 10%. CIA and Simply Business did not provide enough information for us to be able to include them in our analysis.
Landlord insurance: customer reviews
To calculate our customer scores, we surveyed 711 landlords about their insurance providers in November and December 2018.
The overall Which? customer scores below are calculated using a combination of overall satisfaction and the likelihood of the landlord recommending the provider in the future.
How much does landlord insurance cost?
The amount you'll pay for landlord insurance depends on a whole host of factors, including your claim history as well as the history of the property itself.
Other factors include:
- Location of the property
- Type of property
- Number of tenants
- Rebuild cost of property
- Level of contents you're insuring
- The level of excess you choose
Membership of a landlord accreditation scheme may entitle you to a discount from some insurers.
How to find landlord insurance
There are a number of ways you can find and buy landlord insurance, including:
- Price comparison websites
- Directly from insurance companies online or by phone
- Through an insurance broker
- Through a financial adviser
As with any financial product, you should always shop around and compare quotes, and if you're unsure take independent advice before rushing in.
How to claim on your landlord insurance
If you need to make a claim, you should contact your insurer directly.
It's important to do this as soon as possible, as waiting too long could result in your claim being rejected.
Once you've filed a claim, you'll need to provide evidence of what, when and how the issue occurred and what it'll cost to rectify it.
You should provide your insurer with any documents that could help them, including photos, estimates for repairs, invoices and any police report reference numbers if applicable.
How long it'll take your insurer to investigate the claim and respond can vary, so check the conditions of your policy.
Landlord insurance policies: key terms
Insurance documents can be confusing, especially if you're not familiar with the terminology.
Below, we've explained some of the keywords and phrases you'll need to get your head around when choosing a policy.
Insurance policies describe the things they cover as 'perils'. The perils list should be one of the first things you consult when choosing an insurer, as coverage differs between providers.
Insurers will generally allow you to add on extra types of cover (at a cost), and some will allow you to build your own bespoke policy, though in the case of buildings insurance this would have to meet the standards set by your mortgage lender.
The 'sum insured' is the maximum amount an insurer will pay out for any single claim.
As a rule of thumb, the sum insured should be equal to the rebuild cost of your property.
Be sceptical of policies offering to cover huge sums, as there's little point in having £1 million-worth of cover if the entire cost of rebuilding the home would be much less.
Insurers usually adopt an 'automatic reimbursement' process for the sum insured. This means that after you've made a claim the maximum sum insured will usually stay the same; however, your premium may cost more when you renew.
The rebuild cost of your property only covers the raw cost of material and labour to rebuild your home, so it may be lower than its market value.
When you make a claim on an insurance policy, you'll usually need to pay something towards the cost. This is known as the excess.
The level of excess has a big effect on how much the policy will cost you in the first place, so choosing the right amount is very much a balancing act.
For example, standard insurance policies may charge as much as £500 excess on plumbing claims or £1,000 excess on subsidence claims. You can negotiate this down, but you'll need to pay more up-front for the cover.
Rent guarantee insurance will generally come with an excess of one month's rent.
Insurance policies will always feature a list of things that they don't cover. These are called exclusions.
Always take a close look at the exclusions list before choosing a policy.