A straightforward guide from Gallagher to answer the pressing question of just how much landlord insurance costs.
Landlord Insurance

If you’re buying your first rental property or a multiple-property owner, chances are the question ‘how much does landlord insurance cost?’ is high on your list of questions.

Realistically, it can be difficult to give an indication on how much landlord insurance costs without running through a full quotation. It depends on many factors including the level of cover you are looking for. This article will examine these different factors and help you navigate the insurance covers available to landlords and property owners.

This article aims to inform you:

  • Who needs landlord insurance?
  • What landlord insurance typically covers
  • How to save money on your insurance premiums

These are brief product descriptions only. Please refer to the policy documentation paying particular attention to the definitions, terms and conditions, exclusions, warranties, subjectivities, excesses and any endorsements.

How much does landlord insurance cost?

The exact price of your premiums will depend on a number of factors, including:

  • The size and location of your property
  • The type of cover you choose
  • Optional extras
  • The type of tenancy you have or intend to have in place
  • Your insurance history

Here’s a bit more information about what insurers will consider when they are calculating your premium:

  • The type of the property
  • The age of the property
  • The property location – your post code and local area may impact your premiums
  • Whether the property is occupied or unoccupied – regularly unoccupied properties are a target of theft and will incur higher premiums
  • The construction material used
  • Whether there are any renovation works underway
  • The type of tenancy you have in place
  • Number of tenants
  • Rebuild cost

What is landlord insurance?

Landlord insurance is a cover designed specifically for landlords and provides protection for risks such as theft, fire and water damage. It also covers the liabilities and potential losses associated with renting property to tenants.

Landlord insurance shares many similarities with home buildings and contents cover. But there are crucial differences to be aware of when considering a policy. A key distinction between landlord insurance and home insurance is the liability cover afforded to landlords. This can extend to personal injury as well as damage caused by tenants, whether malicious or accidental.

Regular home insurance isn’t designed for the scenarios landlords face. Having the incorrect levels of cover in place may leave you exposed financially and with no cover in place.

What does landlord insurance cover?

Landlord insurance covers different things depending on the details of your policy. It is always worth familiarising yourself with your policy wording so you know what is covered and what is not. Each insurer will have their own policy wording and underwriting criteria so not all policies are the same.

Just like a home insurance policy, landlord insurance depends on your individual circumstances and the protection you require.

The team at Gallagher can discuss the different policies available with you. As an insurance broker, we can approach our insurance panel to find you suitable cover. Here are some of the more common insurance requirements for landlords in the UK.

Landlord building insurance

As a landlord, it is your responsibility to maintain the property for your tenants.

Landlord building insurance is likely to offer protection against the following:

  • Natural disasters – such as lightning, earthquakes and fires
  • Water escape – such as burst pipes and water leaks
  • Theft and vandalism
  • Malicious damage
  • Ground events – landslips and subsidence

Policy limits and exclusions may apply, please see the policy wording for full terms and conditions.

Landlord contents insurance

Not to be confused with tenants’ contents insurance, which covers your tenants’ belongings, landlord contents insurance covers a property’s fixtures and fittings. However, some insurer definitions may vary over what is classed as buildings and contents, so it is always worth checking your policy wording or speaking to the team when you get a quote.

Contents may include:

  • Curtains
  • Kitchen appliances (Fitted appliances are likely to be included in buildings insurance)
  • Light fixtures

Property owners’ liability

Property owners’ liability insurance covers landlords in the instance that tenants or a third party make a legal claim for personal injury or property damage:

  • Indemnity limit for legal costs
  • Personal injury
  • Property damage

This doesn’t change the fact that it is your responsibility to keep your investment safe for your tenants. It is in your best interests to keep your risk exposure as low as possible.

Optional landlord insurance covers

We’ve discussed the most common forms of landlord cover included in insurance policies.

There are several optional levels of cover which many landlords choose to purchase in addition to their main landlord policy.

Accidental damage

Accidental damage cover may safeguard you from the costs incurred by damage caused by tenants and third parties.

‘Wear and tear’ is not included in an accidental damage policy. It is advisable that you check your policy wording to understand what items are covered. For example, some insurers may include carpets as part of the buildings cover.

Legal expenses

Legal expenses cover offers protection for the costs that can arise from the process of evicting a tenant. It’s not the same as property owners’ liability insurance, which is designed to deal with expenses arising from personal injury claims by tenants.

Legal expenses insurance covers:

  • Costs incurred when addressing damage
  • Processing breach of tenancy agreements

If you want to find out more about the standard and optional covers offered by our panel of insurance partners, it’s best to call us to discuss.

Is insurance compulsory for landlords?

Like many forms of insurance, landlord insurance is not a legal requirement.

However, it will probably be requested by your buy-to-let mortgage provider if you are seeking to borrow money to purchase a buy-to-let property. Most providers will require appropriate insurance for borrowing on a rental property.

Landlord insurance is suitable for both first-time and seasoned landlords.

Talk to one of our friendly team today to understand the level of cover that is appropriate for your rental property.

Are they ways to save money on landlord insurance?

Finally, when it comes to the cost of landlord insurance, it’s worth knowing that there are steps you can take to protect your investment as much as possible.

As well as minimising your risk, it may also help to bring down the cost of your premium. It cannot always be guaranteed but is definitely worth mentioning when you are seeking insurance quotations to see if any discounts can be applied.

These may include:

  • Increase security measures to your property with alarms and locks
  • Reduce vacant periods – keeping your property occupied, and any periods of un-occupancy at a minimum
  • Speaking to an insurance broker that can approach a panel of insurance partners on your behalf.

Why choose Gallagher?

Gallagher has been looking after the insurance arrangements for a variety of property owners and landlords over many years. As a broker, we will work with our insurance partners to find a suitable policy that offers the level of protection you need.

We are here all year round. We will guide you through the process both at inception and renewal.

You can start a quotation online or call the Gallagher SME team on 0800 062 2027.