Landlord Insurance UK

What is landlord insurance?

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What does landlord insurance cover?

The basic set up of landlord insurance is similar to other types of property insurance. The following is a general overview of what landlord insurance covers, along with some key features and considerations.

Landlord buildings insurance

This covers the physical structure of the property, including the entire premises such as outbuildings and garages. Examples of areas typically covered by this type of insurance include:

• Walls, roofs, lofts and ceilings.
• Items fitted into the property such as kitchen counters, cooking hobs and baths.
• Pipes and drainage systems.

Below are some key considerations to think about when getting a quote for buildings insurance.

Rebuild cost

If a tenant caused significant damage such as a large fire and this burnt down the entire property, you would need to have some way of rebuilding it. This can be difficult enough, but this nightmare scenario would be even worse if you had regular mortgage repayments due on top of this. The main appeal of buildings insurance is that it covers the entire rebuild of the property and clearing of the site. Many insurers will estimate this. It’s up to you to make sure this is accurate, however. Getting it wrong could result in not being fully covered. Use a rebuild cost calculator or speak to a surveyor if you are not sure.

Landlord liability cover

It is your legal duty as a landlord to make sure that your property is safe. Issues can go wrong even for the most careful of landlords, however. If a tenant is injured or damage occurs to neighbouring property, you could be held liable. Here are some examples: 

• A neglected boiler starts a fire that causes significant burns to a tenant.
• Tenants fall from a balcony that collapses, resulting in them being hospitalised with serious injuries.
• A tenant trips over wiring that had not been concealed, causing them to fall over and hurt themselves.

Having liability cover can give you peace of mind that you have some form of safety net if something did go wrong. Below are the different types of liability cover: 

• Personal liability: This covers you for when you are found liable for an issue that you personally caused, such as wiping the floor with a wet mop without putting down signage and causing someone to slip and hurt themselves.
• Property owner liability: In situations where you as the owner are responsible, such as a loose brick falling and hitting someone, property owner liability can protect you.
• Public liability: Any issue involving liability claims with members of the public.

Dealing with these issues directly could result in having to pay out significant sums and potential legal action. This makes liability insurance an important consideration for many landlords.

Replacement locks

Even good tenants with the best intentions can misplace keys. If your tenants notify you that they lost the keys or someone stole them, not dealing with this issue could result in a potential burglary of your property. Fixing this directly can potentially be costly, however due to a number of variables: 

• The entire door lock will need to be replaced. The cost of the lock will vary depending on what it is.
• In addition to paying for a new lock, you will have to pay for labour costs too.
• If you want the lock fixed urgently, some tradespeople may charge a callout fee.

Most landlord insurers typically cover this to avoid having to deal with more expensive claims later on down the line. Check the amount covered when getting a quote.

Escape of water or oil

This can cover a wide variety of issues. Whilst it can easily be overlooked, this can be a common type of claim and the costs to fix this can stack up. Examples of where this issue could arise include: 

• Blocked drainage: If a tenant blocks a toilet or debris gets caught in a pipe, this can flood the drainage system and cause an overflow of water that spills over into the rest of the property.
• Flooded baths and taps: An overlooked bath or tap with running water can also overspill and cause similar issues.
• Burst pipes: If the property is not adequately heated and the temperature drops overnight in the winter, a frozen pipe can burst if unattended.
• Leaking fluids: The source of a leak is not always obvious. Burst pipes or faulty central heating systems can result in an overflow of water or oil, with the location of the problem not evident until extensive investigation has begun.

 Water or oil damage can be a real problem to fix, potentially resulting in:

• Liquid damage: Liquid overspill can leave significant marks, cause damp issues, and cause permanent damage.
• Repair & labour costs: You will need to pay for repairs to put the issue right and cover the labour costs of tradespeople if you don’t have insurance cover.
• Unsafe environments: Water leaks can cause damp and mould, which may create an unsafe living space for your tenants if not dealt with promptly. 

Other building insurance considerations

There are several other considerations to take in mind when considering buildings insurance for a landlord property: 

• Standard cover: Like regular home insurance, landlord insurance also covers standard issues such as storm, flood and fire damage. 
• Excesses: Insurers may also set different excesses for different claims. For example, subsidence and flood may incur higher excess than a claim for a broken window.
• Location: Where your property is situated can impact a wide variety of factors such as the cost of your premium, cover levels, and insurability. A property built on clay may be more susceptible to subsidence, for example. Homes near rivers or surface water flood risk areas may have to pay higher premiums. If your property is affected by a location specific issue, you may want to shop around for different insurance quotes.
• Wear and tear: It’s natural for areas of the building to wear down over time with continued use of the property by tenants. Landlord insurance is not likely to cover issues affected by wear and tear, however. Try to keep on top of maintenance to avoid issues getting worse and ask your tenant to notify you of any damage as soon as possible.

Landlord contents insurance

Like home insurance, contents insurance for a landlord property covers the items inside of it. As stated earlier, it only covers the landlord’s items, however. Typical landlord items covered include:

• Wardrobes, beds and desks.
• Sofas, chairs and tables.
• Fridges, freezers and washing machines.
• Appliances such as toasters and kettles.
• Carpets and rugs.

Tenants supplying their own contents will need to obtain their own insurance. Below we cover some key areas for landlords to consider when it comes to contents cover.

Furnished properties

Because contents insurance only covers the landlord’s items, it’s only worth considering if the property is furnished. If the property only contains a limited number of furnishings, consider whether contents insurance is needed. Here are some factors that can help you decide this:

• The cost of contents: Are there specific items such as wardrobes or sofas that may be particularly expensive to replace?
• Durability: Do you have items in your property that may be particularly prone to issues? A lighter carpet may make it easier to see any stains and may be more difficult to treat, for example.
• Peace of mind: Some landlords prefer certainty. Contents insurance means that you have protection in case something happens. If you prefer having this kind of safety net, then contents insurance may be for you.

Your sum insured

Consider the total cost of contents you need to insure in your home. Undervaluing this could mean that you don’t have full cover in the event of a claim:

• Take an inventory: Take a note of all the items used to furnish the property.
• All items: Don’t forget overlooked areas such as carpets and curtains that can add up in cost.
• Market value: When assessing the cost of individual items, bear in mind your insurer has a duty to put you back in the position you were in before any claim was made. They will pay you for the market value of an item, not what it was worth when you bought it. Items above the insurer’s allowable ‘single article limit’ may need to be specified individually.

Optional features

Most landlord insurers provide some form of optional add-ons that allow you to choose additional cover features if they are relevant to you. Some of the most common ones are:

• Accidental damage: With tenants living in the property, some form of accidental damage is likely over the years. Whilst some of this can be mitigated by taking money off the tenant deposit, this may depend on the extent of the damage and the hassle involved. Insurance for accidental damage can cover these types of claims if needed. Some insurers only cover accidental damage by the landlord and permanent family members living with them, however. 
• Legal expenses: Disputes that require legal help can be common, ranging from contractual issues to evictions of a tenant. Court costs and legal fees can quickly add up, making legal cover a popular option with many.
• Guest cover: Renting out your property to guests on sites like Airbnb in between tenancies is a useful way to maintain income for many landlords. Cover for this is not universal under standard landlord insurance, however. Some insurance providers, such as Pikl, offer enhanced cover for this as an optional extra.

Insurance for guests

Insurance cover for guests can vary quite a bit when it comes to guest-related claims and standard landlord insurance cover, as properties with paying guests are considered to be a different type of risk. Some landlord insurers may place policy restrictions such as:

• Nightly limits: Some landlord insurers may limit how often you can rent the property out to paying guests. Most insurers will usually put some limit on how often you can do this if you usually have tenants. Some insurers such as Pikl allow you to do this for longer periods in between tenancies, such as up to 90 days per year.
• Cover restrictions: There are some insurers that may not cover guests as standard. Others may offer only mixed or limited cover, meaning that you may not be fully insured for guest claims. 
• Cancellation: If you already have landlord insurance and notify your provider about having guests, they may decide to cancel your policy altogether and ask for you to get cover elsewhere.

Key guest issues to consider

If you require cover for guest related claims as well as for tenant related ones, some insurers can provide additional cover for this. Key areas of cover to consider are:

• Theft and malicious damage: Some insurers may only cover theft and malicious damage inside of the home if there has been forced entry, and not if this occurred as a result of letting a guest into your home. Consider choosing an insurer that covers this, if this is a key area of concern.
• Liability cover: Scotland now requires a mandatory short let licence for any property rented out to guests, with a minimum level of liability cover now being a requirement. Liability claims can arise due to guest injury or third party property damage, or public liability claims involving people not using the property. This can result in significant financial losses and is something you may want to consider regardless of any regional laws.
• Accidental damage: Similar to accidental damage cover for tenants, you can also get the same for guest related claims, so you may want to check that you are covered for this too.
• Legal expenses: Like standard landlord legal expenses, this can cover you for a range of issues from evicting a guest, to covering the cost of HMRC investigations into hosting related activity.
• Loss of income: Claims can result in lost bookings, which can cause both financial loss and hassle. Loss of income cover can mitigate the impact of lost income from pre-existing bookings, although it usually comes with restrictions such as not covering the first 14 days of any covered claim.

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How much does landlord insurance cost?

Like most property insurance policies, landlord insurance does not typically come at a fixed cost. Instead, your landlord insurance premium will depend on a number of variables, such as:

• Local rating factors: Issues such as your home’s proximity to flood risks, crime in the local area and access to emergency services could all play a role in determining how much you pay. These can also change year on year depending on the data the insurer has. Other localised factors such as the cost of hiring contractors in your area can also have an impact.
• National issues: Issues potentially facing everyone, from the rate of inflation to how many claims are being made, may also impact the premium you pay.
• Building type: When looking at the home, your insurer will assess the building materials as well as property security. Anything that is different from what is typically covered may incur a higher premium if this increases the risk or the cost of repairing in the event of a claim. 
• Property use: How the property is used may have an impact, such as whether you also rent out to guests and the type of tenant staying at the home.
• Claims history: Your claims history could have a fairly large impact in addition to any no claims discount you may have. 
• Sum insured: The property rebuild cost and the value of contents you set will also have a significant impact, as larger amounts will typically result in higher premiums. 
• Cover options: Adding additional cover will inevitably increase your premium, as can raising the excess in some cases.

In summary, there are a number of variable factors that can impact the cost of landlord insurance. Make sure that you pick cover that meets your needs before trying to reduce your premium.

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What types of properties does landlord insurance cover?

Each landlord insurer has its own requirements, so it is difficult to definitively cover every type of landlord property that is covered. Generally speaking, landlord insurance can cover a wide range of building types, including:

• Detached, semi detached, and terraced properties. 
• Flats, bungalows and houses.
• A range of different building construction types, although certain materials such as brick and tile are usually easier to cover. 

Where a building type, feature of the property or specific building material deviates from the standard that an insurer covers, this may be more difficult to insure and may require cover from a specialist. Some examples can be found below:

• Listed buildings: These may require more specialist insurance as they have stricter requirements where it relates to repairs.
• Non-standard materials: Less common materials such as thatched roofs may be considered a higher risk, or be more costly to repair. 
• Flat roofs: Flat roofs may be considered riskier than pitched roofs as they lack a natural slope to drain rainwater.
• Specialist buildings: In instances where entire building blocks (e.g. flats)  or commercial properties need to be covered, insurance may need to be sought through a specialist landlord provider. 

The above are just general examples and some insurers may cover different types of properties as standard.    

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What happens when my property is unoccupied?

Unlike regular home insurance, there are several common scenarios where a landlord property may be left unoccupied for a period of time, such as not being able to find a new tenant or leaving the property empty whilst conducting repair work. Depending on the insurer, you can typically leave your home empty for a maximum of 60 days. Some insurers may offer less than this, however. When an extended period of the property being unoccupied is likely, it’s important to let your insurer know as soon as possible. Some insurers may place restrictions or stipulations on your policy when this happens, so speak to your provider if you are not sure. 

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Who are Pikl? 

Founded in 2016, Pikl are specialist, FCA regulated insurance company (FCA number: 773457) that provides cover for both landlords and short-term rentals. Pikl allows you to: 

• Compare insurance prices with a panel containing top insurers such as AXA, Prestige and Allianz.
• Speak to a UK based call centre. 
• Choose between a range of flexible cover options that suit you.

Click on the ‘Get a quote’ button to get a quote today, or speak to a member of our specialist team if you have any questions.