Landlord Insurance

Every home policy is issued on the answers you gave, and one of those answers is who occupies the property. Once tenants move in, that answer is wrong and the insurer has not agreed to the risk it is now carrying.

The consequence is not a smaller settlement. It is usually a declined claim, with the insurer entitled to treat the policy as void from the point the change went undisclosed. That means no buildings cover and no liability cover either, which is the more dangerous half. It applies just as much to accidental lets: moving in with a partner and letting the old flat, keeping the family home on while working away, or letting to a relative for a nominal rent. Your lender matters too, since a residential mortgage normally requires consent to let or a switch to a buy to let product.

This is the part of a landlord policy that most justifies its existence. Property owners’ liability covers your legal liability if a tenant, a visitor, a contractor or a passer-by is injured, or has their property damaged, because of something to do with your building.

A loose stair tread, a tile off the roof onto a parked car, a faulty boiler, a paving slab in the shared path. As the owner you can be pursued for any of it. Cover is normally offered at two, five or ten million pounds, and letting agents and licensing schemes often insist on a minimum figure. The price difference between two and five million is usually trivial, so there is rarely a reason to take the lower one. If you employ anyone directly at the property, employers’ liability is a separate legal requirement.

If a fire or a serious escape of water makes the property uninhabitable, the rent stops, and if the tenancy obliges you to house the tenant you may face the cost of putting them somewhere else.

Loss of rent cover pays the rent you would have received while the property cannot be lived in, usually capped at a percentage of the sum insured or a set number of months, commonly twelve to twenty four. It applies only where the loss follows an insured event. Alternative accommodation cover deals with rehousing the tenant, and it is worth checking the two do not share one limit.

This is not rent guarantee insurance, a separate product covering a tenant who stops paying while still living there, normally with legal expenses for possession proceedings. Loss of rent will not help with arrears.

Tenant type

Landlord policies are rated on who lives in the property. A working professional couple on a standard assured shorthold tenancy is the easiest risk to place. Students, tenants receiving housing benefit or universal credit, and tenants placed by a local authority are treated as separate categories, and a policy issued for professional tenants generally will not cover them. It is an underwriting fact rather than a judgement about anyone, but the proposal has to match reality on the day of a claim.

How the property is let

A house in multiple occupation, a bedsit, a holiday let, or a property let room by room are each rated differently, and an HMO may carry licensing obligations that affect the cover.

Empty periods

Voids are normal and most policies allow around thirty to sixty days unoccupied. Beyond that, cover is often restricted to fire, lightning, explosion and aircraft, with theft, escape of water and malicious damage withdrawn. If a refurbishment will take longer, tell the insurer at the time, because unoccupied property cover has to be arranged in advance.

You are insuring your contents, not the tenant’s. Their belongings are their own responsibility and it is worth saying so in the tenancy agreement. For an unfurnished let, landlord contents cover is a modest sum for carpets, curtains, white goods and light fittings. A furnished or holiday let needs a realistic figure.

Malicious damage or theft by tenants is frequently an optional extension rather than standard, and often carries a condition that a deposit was taken and references obtained. Legal expenses and home emergency assistance are usually add-ons worth pricing if you manage the property yourself. Where you own several properties, a portfolio policy on one renewal date is normally cheaper and far easier to administer.