Landlord Insurance
A let property is not underwritten as a home. The building is occupied by someone with no financial stake in it, the owner is rarely on site to notice a problem early, and the policy has to respond to loss of rental income as well as damage to the structure.
Escape of water is a common source of claims for landlords. A failed flexible hose or a leaking heating pipe in an occupied flat can run for hours before anyone reports it, and in a converted property the water travels into the flat below, which turns one incident into two claims and a dispute about who pays.
Periods between tenancies matter more than most owners expect. Most policies restrict cover once a property has been empty beyond a stated number of days, commonly thirty or forty five, and restrictions may apply to theft, malicious damage and escape of water: precisely the risks an empty property is most exposed to.
We can advise on how a let property should be insured given the type of tenant, the length of the tenancy and how the property is managed, and on the conditions that most often catch landlords out at claim stage.
Common claims and risk exposures
The exposures that produce claims in this trade, rather than a generic list.
Escape of water in an occupied flat
One of the most common landlord claims. A washing machine hose, a radiator valve or a failed seal releases water while the tenant is at work, and in a flat conversion it reaches the ceiling below. Repairing the source is minor; drying the structure, replacing flooring and settling the downstairs owner's claim is not.
Damage caused by the tenant
Accidental damage by a tenant is often excluded unless specifically added, and malicious damage by a tenant is usually a separate extension with its own excess. The distinction decides most disputed landlord claims, and it turns on intent, which is rarely easy to evidence once the tenant has gone.
Loss of rent after a serious loss
If a fire or flood makes the property uninhabitable the rent stops but the mortgage does not. Loss of rent cover is normally expressed as a percentage of the buildings sum insured or a set number of months, and the figure has to be long enough to cover reinstatement plus re-letting, not just the building works.
Gaps between tenancies
A void of a few weeks between tenants is ordinary letting, but it can still trigger the unoccupancy clause. Insurers expect notification beyond the stated period, and often impose conditions such as draining down the system in winter, weekly inspections and securing the letterbox.
Liability to tenants and visitors
As the owner of the structure the landlord carries liability for the parts they remain responsible for: the roof, the boundary walls, the common stairs in a conversion, and anything the tenancy agreement leaves with the owner. A tile from a poorly maintained roof injuring a passer-by is the owner's claim, not the tenant's.
The cover we arrange
We arrange insurance around the property, its use, construction, occupancy and ownership structure. The cover available will depend on the individual risk and the terms offered by insurers.
Buildings
The structure on a reinstatement basis, which is the cost of rebuilding rather than what the property would sell for. In a flat conversion the sum insured should reflect that flat's share of the whole building, including its portion of the roof and foundations.
- Rebuild cost, not market value
- Fire, storm, flood and escape of water
- Subsidence, usually with a higher excess
- Alternative accommodation for the tenant
Property owners liability
Injury or damage to third parties arising from ownership of the building. Most landlord policies carry £2m or £5m as standard, and a managing agent or a lender will sometimes specify the figure they require.
- Injury to tenants, visitors and passers-by
- Damage to neighbouring property
- Limits typically £2m or £5m
- Defence costs included
Loss of rent and alternative accommodation
Pays the rent you would have received while the property cannot be lived in following an insured loss, and the cost of housing the tenant if the tenancy obliges you to. Usually a percentage of the buildings sum insured.
- Rent lost while uninhabitable
- Cost of rehousing the tenant
- Commonly 20 to 30 percent of buildings sum insured
- Check the indemnity period is long enough
Contents the landlord owns
Carpets, curtains, white goods and any furniture provided with the let. A furnished let needs a realistic figure here; an unfurnished one still usually needs something for flooring and kitchen appliances.
- Furnishings provided with the tenancy
- White goods and kitchen appliances
- Carpets, curtains and blinds
- Contents in communal areas you own
Malicious and accidental damage by tenants
Normally an extension rather than standard cover, and often subject to a larger excess and a requirement that the deposit is pursued first. Worth taking where the tenant type or turnover makes it a realistic prospect.
- Deliberate damage by a tenant
- Accidental damage where added
- Higher excess than standard perils
- Deposit usually applied first
What an underwriter will ask
Having these to hand shortens the process considerably, and usually improves the terms.
- The rebuild cost of the property, or of the flat's share of the building
- Tenant type: working, students, housing benefit, asylum or local authority placements
- Whether the let is on an assured shorthold tenancy, and its length
- How long the property has been let, and any periods currently unoccupied
- Whether the property is managed by an agent or by the owner
- Construction: standard brick and tile, or non standard such as timber frame, thatch or concrete
- Flood and subsidence history at the postcode, and any previous claims
- Whether the property is a flat conversion, and who insures the rest of the building
What affects the cost of your insurance?
The main factors insurers consider when assessing the premium.
Rebuild cost and the property itself
The sum insured is the main driver, followed by construction and age. A Victorian conversion with solid walls and a slate roof costs more to reinstate per square metre than a modern flat, and non standard construction narrows the number of insurers willing to quote.
Tenant type and turnover
Long term working tenants attract the keenest terms. Student lets, housing benefit tenancies and local authority placements are rated higher, mainly on malicious damage and frequency of change, and some insurers may decline these risks or apply more restrictive terms.
Location
Flood zone and subsidence history move the price more than anything the landlord controls. A property in a flood risk postcode may be insurable only with a flood excess in the thousands, or through the Flood Re scheme where the property qualifies.
Claims history and excess
Two escape of water claims in three years will be reflected in both premium and excess. Accepting a higher voluntary excess on water damage is one of the factors that may help manage the premium or excess on a property with that history.
Conditions and exclusions to consider
Terms vary between insurers, so treat these as the questions to ask rather than a description of any one policy.
The unoccupancy condition
Beyond the stated number of days, typically thirty or forty five, cover narrows sharply. Theft, malicious damage, escape of water and accidental damage are the usual casualties, so cover may be significantly restricted, depending on the policy wording, unless the insurer is told and agrees terms.
Wear, tear and gradual deterioration
A slow leak that has been seeping for months, perished seals, failing pointing and rot are maintenance rather than insured damage. The resulting sudden escape may be covered while the cause of it is not, which is why insurers ask about the age of the plumbing and the boiler.
Tenant's own possessions
A landlord policy does not insure the tenant's belongings, and the tenant's own contents policy does not insure the structure. Where a tenant has been flooded by a fault in the building, their insurer will usually pursue the landlord's liability rather than simply pay out.
Letting outside the basis of the quote
A policy arranged for a single family let does not automatically respond if the property is later let room by room, to students, or on short term holiday lets. Each changes the risk enough that the insurer expects to be told and to re-rate.
Common questions
Does my own home insurance cover the property once I let it?
No. A residential policy is written on the basis that the owner occupies the property, and letting it without telling the insurer may invalidate or restrict cover, depending on the policy wording and circumstances. Once a tenant moves in the property needs a landlord or property owners policy.
Is landlord insurance a legal requirement?
There is no law requiring it, but a buy to let mortgage almost always makes buildings insurance a condition of the loan, and a leasehold flat will usually require it under the terms of the lease. Employers' liability becomes a legal requirement if you employ anyone, such as a cleaner or caretaker.
How long can the property be empty before cover changes?
Most policies allow thirty or forty five consecutive days, after which restrictions apply. The period is stated in the policy rather than being standard across the market, so it is worth checking the number and telling the insurer before a void runs past it.
Who insures the building if I own a leasehold flat?
Usually the freeholder or the residents' management company insures the whole structure and recharges the cost through the service charge. In that case you would typically insure your own contents, your liability as an owner, and loss of rent, rather than the building itself.
How do I get a quote from True Risk Solutions?
Call 01304 262880 and speak to a broker, or email info@truerisksolutions.co.uk with what you do, what you need cover for and a phone number with the best time to call, and a broker will call you back. We need a phone number to quote, because the cover and the price depend on questions that are quicker to answer on a call than by email.
Speak to a specialist who understands your industry
Tell us about your business and the work you undertake, and we will come back to you with cover options built around it. Call 01304 262880, or email us with a phone number and the best time to call and a broker will ring you back.