Insurance: 4 Things Every Landlord Should Know

In property rental, landlords face unique risks that can impact both their investments and their peace of mind. From accidental property damage to sudden repair costs and missed rental income, unforeseen issues can quickly disrupt your plans as a landlord. This is where landlord insurance comes into play. It's a specialised form of cover to protect landlords from the uncertainties associated with renting out their property.

While landlord insurance isn’t legally required, it’s highly recommended for anyone who rents property to tenants. Not only does it provide cover for various damages and liabilities, but it also helps secure your income, making it an essential safeguard for your investment.

Our guide breaks down the basics of landlord insurance, explains what it covers, and highlights four things every landlord should know before choosing the right insurance policy.

What Is Landlord Insurance?

Landlord insurance is a specialised policy for landlords who rent out their property. Unlike standard home insurance, which typically covers only residential properties, landlord insurance protects against the risks associated with rental properties. This includes property damage, liability claims, loss of rental income, and more.

Types of Cover Under Landlord Insurance

• Building Insurance: Covers structural damage to the property due to incidents like fire, flood, or storm.
• Contents Insurance: Covers loss or damage to furnishings and fixtures provided by the landlord.
• Liability Insurance: Covers legal and medical expenses if someone is injured on the property.
• Rent Guarantee Insurance: Reimburses lost rental income if a tenant fails to pay.
• Home Emergency Cover: Provides assistance for issues like plumbing breakdowns or pest infestations.
• Key Care Insurance: Covers the cost of key or lock replacements if keys are lost or stolen.

Each of these options targets specific risks landlords face, and the right mix of cover can help ensure comprehensive protection. If you’re not sure which type of cover you need, speak with The Letting Experts, and we’ll be happy to advise you, or check with your BTL lender.

4 Things Every landlord Should Know About Insurance

1. It’s Different from Regular Home Insurance

One of the most critical things to understand about landlord insurance is that it's different from standard home insurance. Home insurance policies are usually void if the property is rented out, leaving you without cover in the event of damage or liability claims. Since renting a property increases exposure to potential risks, landlord insurance provides specific protection that home insurance lacks, such as cover for tenant-related incidents and rent loss.

2. Most Mortgage Lenders Require It

While landlord insurance isn't the law, many mortgage lenders require it before finalising a loan on a rental property. If you already have a mortgage or you plan to refinance, verify if your lender requires landlord insurance to protect their investment as well. Failing to obtain landlord insurance when required can result in breaching mortgage terms, which may carry legal and financial repercussions.

3. Landlord Insurance Is Typically Tax-Deductible

One of the financial benefits of landlord insurance is that it’s often tax-deductible. As a necessary expense for maintaining your rental property, landlord insurance premiums can generally be deducted when calculating your annual taxes, which can reduce your overall taxable income. Keeping accurate records of your payments and communicating these expenses with a tax professional can maximise these tax advantages.

4. Discounts May Be Available for Multiple Properties

For landlords managing multiple properties, many insurance providers offer bulk policy discounts. Rather than insuring each property individually, a bulk policy can simplify management and lower costs by consolidating cover all under one plan. This option is ideal for landlords with multiple investments, offering both financial savings and administrative ease.

Types of Landlord Insurance Cover You Should Consider

1. Building Insurance
   Covers structural elements like walls, roofs, and floors.
   Essential for repairs after damage from fire, storms, or flooding.
2. Contents Insurance
   Protects any furnishings, white goods, or other items left for tenant use.
   Ensures landlords aren’t left covering the cost of damages from tenant negligence.
3. Liability Insurance
   Covers expenses if a tenant or visitor is injured due to property-related issues.
   Helps manage costs associated with potential lawsuits.
4. Rent Guarantee Insurance
   Protects income if tenants miss payments, allowing cash flow continuity.
   Many policies also cover legal fees if eviction becomes necessary.
5. Home Emergency Cover
   Provides assistance for urgent repairs, such as fixing leaks or pest infestations.
   Valuable for landlords who don’t want to be on call for every unexpected repair.
6. Key Care Insurance
   Covers the cost of replacement keys or locks if keys are lost or stolen.
   Particularly useful for properties with high tenant turnover.

Each policy has unique benefits, so it's crucial to assess your property’s specific needs and consult with an insurance advisor to tailor the right package.

Additional Considerations for Landlord Insurance

While landlord insurance provides peace of mind, there are some additional considerations:

• Policy Exclusions: Some policies exclude damages from certain events or types of tenants. Check if there are exclusions for high-risk tenants, such as students or short-term renters.
• Excess Fees: Review the policy excess or deductible amounts, which can vary depending on cover types.
• Customisation Options: Many policies are customisable. You can add extras like accidental damage or malicious damage cover to further protect against specific risks.

Rent With Confidence

Landlord insurance is a critical layer of protection, offering financial security and peace of mind. With the right policy, you can rent your property out confidently, knowing that unexpected events won’t disrupt your investment or income. At The Letting Experts, we can help you let your property with the confidence and security you need.

For more advice on landlord insurance and property management services, please get in touch with us today on 0333 344 9915 or email hello@thelettingexperts.co.uk.

In the meantime, we've answered some of your common questions about landlord insurance.

Frequently Asked Questions About Landlord Insurance

Do I need landlord insurance if I already have home insurance?

Yes. Standard home insurance does not cover rental properties. Landlord insurance is specifically designed for the needs of property owners who rent out their properties.

What does landlord insurance cover?

Typical landlord insurance policies cover building damage, liability, and lost rental income. Optional cover can include protection for contents, emergency repairs, and key replacement.

How much does landlord insurance cost?

The cost depends on factors such as property value, location, and the level of cover. Comparing quotes from different insurers helps find the most cost-effective option.

Is landlord insurance mandatory by law?

No, but most mortgage lenders require it to protect their investment. It’s also highly recommended for safeguarding your property and income.

Can I include landlord insurance costs on my tax return?

Yes, landlord insurance premiums are usually tax-deductible as an allowable expense for rental properties.

Are there discounts for insuring multiple properties?

Many insurers offer bulk discounts for landlords insuring several properties under one policy.

With this information, you’ll be well-equipped to make an informed decision about landlord insurance. For additional guidance on property management or choosing the best insurance options, don’t hesitate to contact The Letting Experts on 0333 344 9915.