Letting out a property can be an effective way to earn some extra income, but it also comes with certain risks. From structural damage in the event of a burst pipe to accidental (or even) malicious damage caused by tenants, many things can go wrong. Ensuring you have the proper insurance can help mitigate these risks and give you peace of mind about your rental properties. 

In this guide, we’ll cover the 9 types of insurance you might want to bear in mind for your rental property. Some of these, like building and contents insurance, are essential, but others are optional extras that offer you more protection if you need it.

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1. Landlord buildings insurance  

This is one of the most common types of cover. Landlord buildings insurance covers rebuilding or repairing your rental property if the structure is damaged. Most, if not all, landlord insurance policies will include building insurance.

It usually covers damage caused by:

• Natural disasters or weather.
• Subsidence.
• Fire or smoke.
• Theft or vandalism.
• A flood or burst pipes.

Building insurance won’t usually cover damage caused by:

• Normal wear and tear.
• A lack of or improper maintenance.
• Pets or animals.

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2. Landlord contents insurance 

You won’t require contents insurance to protect your tenant’s belongings (this responsibility lies with the tenants). However, if you’re renting out a part or fully furnished property, a landlord contents insurance policy protects your furniture, white goods and other items from damage. Contents insurance is often included alongside building insurance in landlord insurance policies. 

It usually covers:

• Damage to items from fire and flooding.
• Theft of your items from your rental property.
• Damage to appliances, gadgets and electrical equipment.
• Damage to clothing and linen.

Some policies will cover:

• Malicious or deliberate damage to your items caused by your tenants. 

Contents insurance doesn’t usually cover:

• Damage caused to the structure of your property.
• Damage caused by normal wear and tear 
• The natural mechanical breakdown of your items.

• Any items above the limit of your policy.

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3. Accidental damage insurance

Accidental damage insurance can usually be added to your landlord's contents or building insurance policy. This insurance covers the costs of repairing or replacing anything in your rental property that’s damaged accidentally by either you or your tenants.

It usually covers:

• Stains on carpets.
• Damage to curtains or blinds.
• Damage to appliances. 
• Broken windows.
• Accidental damage to walls or pipes.
• Flood damage as a result of a tap being left on.

Accidental damage insurance for landlords will not cover:

• Any malicious or deliberate damage.
• General wear and tear.
• Damage caused by animals.

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4. Malicious damage insurance 

This may be included in your policy, or you can add it as an extra. Malicious damage insurance covers any damage done that’s malicious or intentional. 

Some policies will define malicious damage as damage done by someone who does not have a legal right to be on the property, for example, burglars or vandals. Other policies will also include malicious damage caused by tenants or their guests. You’ll need to check the wording carefully to know what you’re covered for, what excess applies and if you need to pay extra to be covered against deliberate damage by your tenants.

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5. Landlord liability insurance 

If a tenant, contractor or visitor injures themselves on your property, they may decide to pursue you for compensation. This public liability insurance can protect you against the legal cost of going to court and cover any compensation awarded (up to the cover limit). It is usually included in a provider’s standard landlord insurance policy, but you may have to request it as an extra.

It usually covers scenarios such as:

• If a tenant trips on loose flooring and gets injured. 
• If a loose tile falls off the roof and hits a pedestrian, tenant or car.
• If pipes leak due to poor maintenance and the tenant’s belongings are damaged.

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6. Legal expenses insurance

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Legal expenses or deposit replacement insurance can help cover costs if you have a legal dispute with your tenant. It is usually included with public liability insurance. This policy ensures your legal costs will be covered in case you have to go to court over something related to your let – such as to evict a tenant or pursue unpaid rent.

Alternatively, you can opt for a deposit replacement insurance policy. Instead of a deposit, the tenant will pay the insurer a non-refundable fee (approximately 1 week's rent). In the event of a disagreement about damages to your rental property, the policy will pay out the equivalent of a set amount of rent (often 6 weeks). This offers you more protection than a standard deposit, and some policies will also cover any legal expenses incurred. 

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7. Unoccupied property insurance

Landlord insurance will typically cover empty properties up to a set amount of days, usually 60 - 90 days, though it might be higher for student properties. If your property will be unoccupied for longer than this time, you should consider taking out specialist landlord insurance for unoccupied properties.

Empty properties are at greater risk of being broken into or damaged because no one is living there to spot any problems or deter burglars, so your rental property should be protected. 

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8. Rent guarantee insurance

Rent guarantee insurance (also called tenant default insurance) covers you if a tenant fails to pay their rent, helping to mitigate one of the major risks of property rentals. This is an essential insurance policy if you depend on your rental income.

This insurance should protect you against a loss of rent if your tenant falls into rent arrears or if you cannot rent out your property because of damage that occurred during an insured rent. However, not all policies will cover both eventualities and some policies may only cover a portion of the rent if the property is damaged and can’t be let out. 

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9. Landlord home emergency cover 

If you manage the property yourself, you could receive a call from your tenants any time of the day or night to report an emergency. Taking out home emergency cover gives you and your tenants access to a 24/7 repair service for things like plumbing and heating problems, drain and sewer issues, electricity problems, infestations and lost keys. This gives you access to a team of certified professionals who will deal with the emergency as soon as possible (usually on the same day) and prevent further damage. 

Tenants can usually report issues directly themselves, so if you can’t be contacted for any reason or can’t deal with things right away, you have peace of mind that the emergency can be handled professionally in your absence.

This usually includes cover for the following issues (up to the claim limit):

• Plumbing or heating emergencies (some policies will also include boiler cover).
• Failure of domestic electric, gas or water services.
• Lost or broken keys.
• Roof damage or leaks.
• Blocked drains.
• Burst or leaky pipes.
• Pest removal.

• Overnight accommodation costs if the property is unsafe for your tenants.

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What insurance do I need as a landlord?

Landlord insurance isn’t a legal requirement, and if you own your rental property outright, you technically don’t have to have any form of insurance. However, if you need a buy-to-let mortgage, the lender will require standard landlord insurance that covers the building at a minimum.

Standard policies will differ significantly in what’s included in them, and it’s essential that you choose carefully. You’ll want to choose a level of coverage that aligns with your risk tolerance. Opting for extra add-ons or specialist policies that cover missed rent payments or deal with home emergencies can give you peace of mind about your rental property. 

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Specialist landlord insurance policies by Lets Insure

Lets Insure offers a range of specialist insurances designed to give landlords peace of mind and make their lives easier. We offer rent guarantee insurance, home emergency cover and deposit replacement insurance.

Rent guarantee insurance

Rent guarantee insurance is a legal expenses insurance contract that protects you if tenants stop paying rent during their tenancy. This policy pays up to a maximum of £2,500 per calendar month from the date of the first missed payment until you gain legal vacant possession. This ensures you don’t miss out on vital income.

Lets Insure also offers a premium Rent Guaranteed service, which ensures you’re paid rent on time each month, offering extra peace of mind and removing the time and stress of chasing tenants for missed or late payments. 

Home emergency cover

Our home emergency cover gives you 24-hour access to an expert team of certified contractors. They’ll resolve any emergencies in your rental property as quickly as possible to minimise damage and disruption to your tenants. This takes the stress out of trying to deal with emergencies yourself. 

Deposit replacement insurance

This legal expenses insurance covers you if there is a dispute over damage found in the property. It acts as an alternative to a traditional deposit. 

The tenant will pay us a non-refundable fee (approximately 1 week’s rent), which then insures you in case of a dispute. The policy will cover legal expenses up to £50,000. If a settlement cannot be reached, we will pay the amount you are claiming from the tenant (up to a maximum of 6 or 12 weeks' rent).

Visit our site to view our full range of landlord insurance policies.

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