What Does Landlord Insurance Cover?

If you rent out a property in the UK, standard home insurance is not enough. You’ll need a specialist policy known as landlord insurance, which is designed to protect property owners who let out residential or commercial buildings. Whether you're renting to tenants, students or even family, it’s important to know what’s covered, what’s not, and whether it's legally required.

This guide explains what landlord insurance includes, how to choose the right cover, and when it’s needed.

What Is Landlord Insurance?

Landlord insurance is a type of policy designed to protect property owners who rent out homes or buildings to tenants. Unlike standard home insurance, which covers owner-occupied homes, landlord insurance considers the additional risks of renting out a property, such as damage caused by tenants, rental income loss, and liability claims.

Policies can be customised based on the type of property, tenant, and level of risk, and may include a wide range of optional extras.

What Does Landlord Insurance Include?

Most landlord insurance policies offer core buildings cover, with options to add protection for other risks. Here's what is usually included:

Buildings Insurance

This covers the structure of the property against risks such as fire, flood, storm damage, vandalism and subsidence. It pays for repairs or a rebuild if the property is badly damaged.

Property Owners' Liability

Covers legal costs and compensation if a tenant, visitor or tradesperson is injured on your property and you are found legally responsible. This is especially important if someone trips on a loose stair or is injured by falling tiles.

Loss of Rent

If your property becomes uninhabitable due to an insured event like fire or flooding, loss of rent cover can replace the rental income you’d otherwise miss out on during repairs.

Contents Insurance

If you let a furnished property, this can protect furniture, appliances, carpets and curtains. It won’t cover tenants’ belongings – they’ll need their own contents insurance.

Accidental Damage

Some policies offer limited or full accidental damage cover. This might include things like a broken window, carpet spills or damage caused by a tenant or their guests.

Malicious Damage by Tenants

This can cover the cost of intentional damage caused by tenants, although not all policies include it as standard.

Legal Expenses

Covers the cost of legal action, such as evicting tenants, recovering unpaid rent, or resolving disputes over property damage.

Rent Guarantee

Sometimes included as an add-on, this provides cover if a tenant fails to pay their rent, subject to terms such as reference checks and tenancy agreements.

Is Landlord Insurance Mandatory?

Landlord insurance is not a legal requirement in the UK. However, many buy-to-let mortgage lenders insist you have adequate buildings cover as a condition of the loan.

Even if it's not required by law, having cover is highly recommended. Without it, you’d be liable for any property damage, legal disputes or compensation claims that arise during a tenancy.

Do I Need Landlord Insurance if Renting a Room?

If you’re renting out a room in your main home (such as to a lodger), you may not need full landlord insurance. However, your home insurance policy may need to be updated to reflect the change in occupancy. Some insurers may allow for lodgers, but others will require a more specialist policy.

Check with your insurer before renting out any part of your home.

Do I Need Landlord Insurance if Renting to Family?

Yes, it’s still a good idea. Even if your tenants are family members, you remain legally responsible for the condition of the property and could still face costs for repairs or liability. Some insurers may charge differently or have specific rules when renting to relatives, so always disclose the tenancy type when arranging cover.

How Much Does Landlord Insurance Cost?

The cost of landlord insurance depends on several factors, including:

• The type, size and location of the property

• The value of the building and contents

• The type of tenants (e.g. professionals, students, DSS tenants)

• Whether the property is furnished or unfurnished

• The amount and type of cover selected

On average, landlord insurance in the UK can cost anywhere from £150 to £500 per year, although high-value properties or those in higher-risk areas may be more.

What Landlord Insurance Do I Need?

The right policy depends on the nature of your property and tenancy. At a minimum, most landlords should have:

• Buildings insurance

• Property owners’ liability

• Loss of rent (for uninhabitable property)

Optional cover such as contents insurance, legal expenses or rent guarantee can be added depending on your budget and risk exposure.

How Much Landlord Insurance Cover Should I Have?

Your buildings insurance should be based on the rebuild value, not the market value, of the property. This is the cost of rebuilding it from scratch, including demolition, materials and labour. You can get this figure from a surveyor or use a rebuild cost calculator.

For contents, insure only the items you own, not your tenant’s possessions. For liability cover, many policies offer £2 million to £5 million as standard.

What Is Landlord Property Insurance?

Landlord property insurance typically refers to the buildings and contents part of landlord cover. It protects your investment against physical damage and loss, and forms the core of most landlord insurance policies. This should not be confused with liability or legal cover, which may need to be added separately.

Final Thoughts

Landlord insurance provides essential protection for property owners letting out homes to tenants. While not legally required, it can protect against costly risks like property damage, rent loss, legal claims and liability.

To get the right policy, consider the type of property you own, who you’re renting to, and how much you can afford to pay if something goes wrong. Always read the terms and exclusions carefully, and if in doubt, speak to a specialist landlord insurer or broker.