Let Property Insurance

What does let property insurance mean?

Let property insurance is designed for a home that is rented to tenants. It is also commonly called landlord insurance, rental property insurance or buy-to-let insurance.

It differs from standard home insurance because the owner does not live at the property as their main home. Letting a property can create risks and responsibilities that a normal owner-occupier policy may not cover.

You should tell your insurer that the property is let. You may also need to tell your mortgage lender. MoneyHelper explains that residential mortgage customers should contact their lender before letting a property. The lender may give consent to let or require a buy-to-let mortgage.

What can let property insurance cover?

The protection provided will depend on the insurer, the options selected and the policy terms.

Buildings cover

Buildings insurance can protect the structure of the property against specified events. These may include fire, storm, flood, subsidence and escape of water.

The Association of British Insurers explains that buildings insurance usually covers the structure and permanent fixtures. The sum insured should normally reflect the cost of rebuilding the property, rather than its market value.

Landlords should check the excess, exclusions and any rules on underinsurance. Our glossary explains more about rebuild cost and the buildings sum insured.

Landlord-owned contents

Contents cover may protect items supplied by the landlord. This could include furniture, appliances, carpets and curtains.

It does not usually protect a tenant’s personal belongings. Tenants will normally need their own contents insurance. Landlord contents protection may also be optional, so you should not assume it is included.

Property owners’ liability

A policy may include property owners’ liability. This can cover certain legal costs and compensation if someone is injured or their property is damaged and the landlord is legally responsible.

Limits and exclusions apply. The cover will not respond to every accident, injury or disagreement.

Loss of rent

Some policies may cover loss of rent when insured damage makes the home unfit to live in. For example, cover may apply while repairs are carried out after a fire or flood.

This is not the same as rent guarantee insurance, which is intended for certain cases where a tenant fails to pay. Loss-of-rent cover is usually limited by time, value and the cause of the damage.

Legal expenses, home emergency protection and malicious damage by tenants may also be available. These features are not included in every policy.

Is let property insurance required by law?

There is no single UK-wide rule requiring every private landlord to buy landlord insurance. However, Rent Smart Wales says landlord insurance is a mandatory licence condition in Wales.

Suitable buildings insurance may also be required by a mortgage lender, freeholder or lease. MoneyHelper notes that buildings insurance is normally required when a property is mortgaged.

Landlords should check their mortgage agreement, lease and policy documents before the tenancy begins.

What might an insurer ask for?

An insurer may ask about:

• The property’s age, location and construction.
• The rebuild cost and security measures.
• The type and number of tenants.
• Previous claims, flooding or subsidence.
• Whether the home is furnished.
• Planned renovations or building work.
• How long the property may be empty between tenants.

You should provide complete and accurate information. You may also need to report changes during the policy term.

What should landlords check?

Check the cover limits, excesses, conditions and exclusions before buying a policy.

Pay close attention to rules for an unoccupied home. Cover may be reduced when a property is empty for longer than a stated period. The insurer may also require regular inspections, heating, water-system checks or extra security.

The Financial Ombudsman Service explains that unoccupied-property claims often depend on the exact policy wording and whether the insurer’s conditions were met.

You should also check that the policy covers the intended type of tenancy. Insurers may treat families, students, multiple occupants, holiday guests and short-term lets differently.

How we may be able to help

We arrange landlord insurance for a range of rented homes. This may include properties with claims, flood risk or other details that need specialist consideration.

The cover, price and insurer requirements will depend on the property, tenants, claims history and full information provided. Any policy arranged will be subject to its terms, limits, excesses and exclusions.

In summary

Let property insurance is designed for a home rented to tenants. Depending on the policy, it may cover the building, landlord-owned contents, legal liability and rental income following insured damage.

Policies vary. Landlords should check that the tenant type, use of the property, sums insured and optional covers meet their needs.