Letting a property to multiple unrelated tenants, such as a group of students or young professionals, will require specialist HMO landlord insurance. HMOs often have additional risks, which is why standard landlord insurance might not provide adequate coverage. 

The landlord insurance experts at Lets Protect have put together this guide with all the information you need if you’re considering becoming an HMO landlord. This guide includes:

• What is an HMO property?
• What are your responsibilities as an HMO landlord?
• What is HMO landlord insurance?
• What is covered by HMO landlord insurance?

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What is an HMO property?

A house of multiple occupancy (HMO) is a property rented out to several tenants who are not part of the same household or family. HMOs are common for students or young professionals who will have their own bedrooms but share common areas, such as bathrooms, living rooms and kitchens. 

According to the Gov.uk website, a property is defined as an HMO if the following criteria apply:

• There are at least three tenants which form more than one household. 
• There are shared toilet, bathroom or kitchen facilities.

A household consists of a single person, a couple, or members of the same family who live together (including stepchildren). 

An HMO won’t generally need a licence unless five or more people occupy it. You'll need to apply through your local authority, and details of how to apply can be found on the Gov.uk website. 

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What are your responsibilities as an HMO landlord?

In addition to the standard landlord responsibilities, there are extra responsibilities you’ll have to consider if you choose to rent out an HMO:

You’ll have to ensure:

• smoke detectors and carbon monoxide alarms are installed and maintained
• the electrics are checked every five years, and the gas is checked annually
• the property is not overcrowded
• there are suitable washing, cleaning and cooking facilities
• rubbish disposal facilities are provided 
• communal areas and facilities are kept clean and are in good condition
• the bedrooms meet the minimum size requirements (6.52 square metres for one occupant over ten years of age - be aware some councils have set higher minimums).

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What is HMO landlord insurance?

HMOs come with unique risks - many HMO landlords face an increased likelihood of building and contents damage, loss of rental payments, and theft. This is why many landlords will need specific HMO insurance to ensure they’re fully protected. HMO landlord insurance is specifically designed to protect multiple occupancy buy-to-let properties.

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What is covered by HMO landlord insurance?

Different HMO landlord insurance policies will provide different levels of cover. However, here’s a breakdown of what most policies will include as standard or as additional cover:

• Buildings insurance. This will cover the cost of rebuilding or repairing your property after damage caused by an insured event, including fire, theft, storm damage and floods. Some policies will include accidental or malicious damage, but others will require you to pay extra.  
• Contents insurance. This will cover the cost of fixing or replacing any items you provide for your rental property, such as furniture or appliances. Contents insurance is essential for HMO landlords as many HMOs are fully furnished.
• Public liability insurance. Having multiple unrelated tenants in a property can increase the likelihood of liability claims, so it’s always a good idea to have this in place. If there is a claim by a third party who is injured on or by your rental property, this will cover legal fees and compensation. 
• Loss of rent cover. This is included in some policies. It protects you if your tenants have to move out of the property due to an insured event. 
• Rent guarantee insurance. If you depend on your HMO rental income, this insurance will guarantee your rent is paid, even if your tenants miss a rental payment. This is often something you’ll need to pay extra for.
• Legal expenses cover. This covers your legal expenses if you need to go to court to claim damages, evict a tenant, or claim back rent arrears. 
• Home emergency cover. This can be a useful addition for landlords who manage multiple HMOs, and it will cover the cost of calling out a contractor to fix an urgent issue or emergency in your rental property, for example, a burst pipe. 

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Specialist landlord insurance policies by Lets Insure

If you’re an HMO landlord or thinking of becoming one, you must have the correct insurance in place to protect your rental property and income. 

Lets Insure offers a range of specialist insurance policies designed for both single lets and HMOs. Our aim is to make landlords' lives easier and offer them peace of mind about their rental properties. We offer rent guarantee insurance, home emergency cover and deposit replacement insurance.

Rent guarantee insurance for HMOs

This rent guarantee insurance will protect you if one of your tenants stops paying rent during their tenancy and you need to evict them. We’ll pay up to a maximum of £2,500 per calendar month from the date of the first missed payment until you regain legal vacant possession of your property. We’ll also pay 75% of your rent for two months after you’ve gained possession if the property can’t be relet immediately due to damage. 

Our rent guarantee insurance covers single and multiple-occupancy lets. We offer a unique and cost-effective option for HMOs. Instead of having one policy per room, our insurance for HMOs allows you to have multiple rooms on one rent guarantee insurance policy.

We also provide a premium Rent Guaranteed service. This service ensures you’re paid on time each month, regardless of whether your tenants do. There’s no need to stress about chasing up late payments or worry about the financial repercussions if your tenants fall into rent arrears. 

Home emergency cover

If you own multiple HMOs or rental properties, it can be challenging to make yourself available whenever there’s an emergency. Our home emergency cover gives you 24-hour access to a team of certified contractors. They’ll deal with any issue in your HMO as quickly as possible to reduce the likelihood of further damage and minimise disruption to your tenants. 

Deposit replacement insurance

This alternative to a traditional tenancy deposit protects you if there’s a dispute over the damage found in your rental property. The tenant will pay us a non-refundable fee (approximately 1 week’s rent), which will insure you if there’s a dispute about damage. Our deposit replacement insurance 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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