The differences between landlord and home insurance

When you rent your property out to tenants, you need to ensure that your investment’s properly protected. The vast majority of tenants will take good care of your property, with a recent survey we conducted revealing that 96% of landlords are happy with their tenants. However, sadly, accidents do still happen and renting out a property is never an entirely risk-free activity. As a result, landlord insurance is necessary to make sure that your investment is properly secured. Here’s why specialist landlord insurance is an essential for buy-to-let property owners.

Why Do I need landlord insurance?

When you become a landlord, you’ll need to take out insurance that’s specifically fit for purpose. This is because, when you rent out a property, there are a higher number of risks associated, and these won’t all be covered under a standard home insurance policy.

If you submit a claim on home insurance taken out in your name when you’re letting out a property, your insurer may reject it, leaving you out of pocket and potentially footing a large bill. So, without specialist landlord insurance, you might not be covered at all and this may jeopardise your investment. Regardless of whether you’re renting out a single property or insuring a substantially sized property portfolio, you need to opt for specialist landlord insurance to make sure you’re effectively covered and your investment is protected against risks and unexpected costs.

As part of this, once you have landlord insurance, it’s vital that you let your insurer know about any change in circumstances, including when your tenants change and if the property is empty between tenancies. This is known as a ‘void period’.

There’s no legal requirement for you to insure a property that you’re currently renting out. However, if you’ve taken out a mortgage on your property rather than buying it outright, your lender may insist that you have adequate insurance in place. As a result, you should look for insurance options that are specifically designed for landlords as it will help you safeguard your financial future.

What specific protection can it provide?

Choosing the right level of cover for your property can be difficult. However, our landlord insurance comparison tool can help make it a little easier for you (by letting you compare key product features for every other landlord insurance policy on the market*). Your property faces a number of risks when you rent it out.

The cheapest policy you find may not necessarily be the best suited to your needs and you’ll have to check that the policy gives you all the protection you need. Landlord insurance can come in many parts, including buildings insurance, contents insurance, liability insurance, emergency assistance insurance, legal expenses insurance and rent guarantees. You’ll need to consider which elements of cover you might want.

Each landlord insurance policy will have specific product features. Ours includes:

  • Cover towards the loss of rent incurred following an insured incident
  • Cover provided towards the cost of alternative accommodation if the property is unfit to be lived in following an insured incident 
  • The option to provide cover, up to the sum insured, for the repair of malicious damage caused by tenants
  • The option to repair damage caused by a tenant’s use of the property for the illegal manufacturing of drugs up to the sum insured
  • Up to £1,000 towards the cost of replacing the locks should the keys to the property be stolen (if you opt to cover your contents)
  • Up to £1,000 to cover the accidental loss of metered water at a property because of an insured peril.
  • Up to £2,500 for items stolen from an outbuilding at your property (providing you’ve covered your contents).
  • Property Owners Liability to cover any accidents that result in loss or damage to a property or illness or injury to a person.
  • Legal expenses and costs cover in respect of proceedings for insured incidents such as recovery of rent, eviction or repossession.
  • Rent Guarantee. This is an optional extra that provides up to 12 months cover in respect of rent arrears owed by the tenant.
  • Cover against the cost of any emergency repairs that are required following an emergency at the property, such as a loss of central heating.
  • If the property is unfit to be lived in following an insured incident, cover is provided towards the cost of emergency overnight accommodation.
  • An emergency helpline which is available 24 hours a day, seven days a week.

Where can I get landlord insurance?

Researching and comparing a number of different landlord insurance products can be a daunting task, particularly if you’re an active landlord. That’s why we’ve launched our landlord insurance comparison tool, which is powered by Defaqto (an independent financial researcher). Our simple tool lets you compare the key product features for landlord insurance at the touch of a button, so you can find the perfect landlord insurance product for your rental properties. This way, you can be 100% certain of the landlord insurance product you’re buying. Give it a try and make sure you’re properly protected.

*HomeLet’s landlord insurance comparison tool is powered by Defaqto. This is updated daily whilst every effort is made to ensure that every policy on the market is included.