Landlord insurance: what it covers and why it matters

Once you begin renting out a property to tenants, you’re faced with the potential risks inherent in being a landlord. This could include damage to the building, claims for injury from your tenants or the property becoming unrentable due to a serious event. 

To protect your new buy-to-let business against these possible risks, it’s vital to take out landlord insurance before you lease out the building.

Let’s explore what landlord insurance is, why you need it and the kinds of insurance coverage that should be included. 

What is landlord insurance and who needs it?

Landlord insurance is specialist cover for property owners who let out residential homes, flats and houses in multiple occupation (HMOs). 

Once you rent out your property to tenants, your standard home insurance policy will be invalid. Basic home and contents insurance won’t cover usage by third-party tenants, so it’s vital that you take out landlord insurance. 

A standard landlord insurance package will provide protection for your building, liability to claims from tenants or visitors and cover for your rental income. Packages can be tailored to the needs of single-property landlords or those with a portfolio of multiple properties.

Is landlord insurance needed to get a buy-to-let mortgage?

Having landlord insurance is often a requirement of buy-to-let mortgage lenders, so it’s essential to have cover arranged if you intend to buy a new property. 

If a new mortgage condition or renewal demands higher limits, or you’re struggling to cover the upfront costs of insurance, you may benefit from a short-term business loan.

Flexible loans, like an iwoca Business Loan, can provide the funding to bridge the cost, helping you find the coverage you need to get that buy-to-let mortgage. 

Is landlord insurance a legal requirement in the UK?

Landlord insurance is not required by UK law. However, many mortgage lenders and managing agents will require you to have appropriate landlord cover. Public liability insurance is often stipulated in leases or tenancy agreements to provide you with cover against claims made by your tenants.

What does landlord insurance typically cover?

Landlord insurance includes a mix of policies to protect you and your property against the key threats of leasing out your building to third-party renters. 

Let’s look at some of the foundational areas of cover that your landlord insurance must provide:

1. Building insurance: This core policy protects your property's structure, including the permanent fixtures and fittings (kitchens, bathrooms, etc.), against major risks. This will typically include risks such as fire, flood, storm damage and burst pipes. It’s essential, as standard home cover is invalid for rental use.
2. Landlord contents insurance: Contents insurance covers the items you supply for the tenant's use (for example, furniture, carpets and appliances) against insured risks like theft or fire. Crucially, it excludes any personal belongings owned by the tenant, which they must insure separately.
3. Property owners’ liability insurance: Liability cover protects you if a tenant or visitor suffers an injury or damage is caused due to a fault with the property (like a loose tile or railing). The policy will usually cover your legal defense costs and any subsequent compensation payments.
4. Loss of rent cover: If the property becomes legally uninhabitable following an insured event (like a serious fire), this cover compensates you for the lost rental income while repairs are undertaken, or pays for the tenant's temporary housing.
5. Accidental damage cover: This optional add-on protects you against damage caused specifically by the tenants. This could be a spill that stains a carpet (accidental damage) or intentional destruction of your property (malicious damage).
6. Legal expenses and rent guarantee: Legal expenses insurance covers court costs for tenant disputes (such as an eviction), while rent guarantee cover pays out if a tenant defaults on their rent, subject to certain referencing and notice requirements.
7. Employers’ liability insurance: If you directly employ staff, such as a maintenance person or caretaker, having employers’ liability cover is a legal requirement. It covers you against claims made by those employees for injury or illness sustained as a result of working for you. 

Does landlord insurance cover boiler breakdowns or loss of rent?

Landlord boiler breakdown coverage is usually an optional home emergency/boiler cover add-on that you’ll need to add to your basic landlord insurance bundle. 

Loss of rent insurance is typically covered only when the property is uninhabitable due to an insured peril – not for tenant arrears unless you add rent guarantee insurance.

How much is landlord insurance in the UK?

As with all insurance premiums, the price you pay for your landlord insurance can vary greatly from landlord to landlord. Insurers will tailor your bundle of landlord-related coverage to your precise needs, so a single-property landlord will pay considerably less than a buy-to-let business with multiple properties to insure.

According to recent figures from SimplyQuote, the average cost of landlord insurance in the UK is between £224.93 and £233.90* per year. However the premium you pay could be as low as £66 or as high as £1,400+*, depending on your property type, location and insurance profile. 

*Prices correct as of June 2025, as quoted by SimplyQuotes

What drives the price you pay for landlord insurance?

There are several factors that can affect the price you pay for landlord insurance. 

Key drivers can include:

• Rebuild cost: This is the cost to rebuild the property from scratch (not the market value) and directly determines the maximum payout your insurer might face. Higher rebuild costs mean a higher sum being insured, which will lead to an increase in your premium.
• Location (crime/flood): Insurers assess your postcode for historical data on crime rates (theft, vandalism) and flood risk or coastal erosion. Areas with higher aggregated risk lead to a significantly increased premium cost.
• Property type: A standard single-dwelling house is the cheapest property to insure. Flats (due to shared structural liability) and HMOs are seen as more risky and will cost substantially more to insure.
• Tenant profile: Insurers categorise tenant types based on perceived risk. Students or benefit claimant tenants are generally seen as higher risk than professionals, leading to a higher premium for the landlord.
• Claims history of landlord: A history of making prior claims – especially for high-cost incidents like escape of water – signals higher future risk to the insurer. This will result in a marked increase in your renewal premium.
• Optional add-on coverage: Adding extra coverage types, such as malicious damage by tenants or rent guarantee cover, increase the payout risk for the insurer. Because of this, your overall policy price will rise as you add more coverage to the bundle.
• Excess level: The excess is the amount you, the insuree, agree to pay on any claim. Choosing a higher voluntary excess signals that you’ll absorb smaller claims, which typically results in a reduction in the annual premium.

How can you save money on your insurance premium?

As we’ve seen, there are a number of variables that can influence the end price you pay for your landlord insurance. But you can get proactive and take steps to reduce the price you pay for your cover.

Here are a five key ways to reduce the cost:

1. Accurate rebuild valuation: By using a surveyor or online calculator to set an accurate rebuild cost, you can avoid over-insuring the property. This ensures the premium you pay matches the necessary indemnity and insurance levels.
2. Higher voluntary excess: If you choose to absorb a greater share of the cost for minor claims (a higher excess), this signals a lower risk to the insurer – and an associated reduction of your annual premium.
3. Security improvements: Installing insurer-approved security features (like approved alarms, secure locks, or perimeter fencing) reduces the risk of break-ins and theft. This can lead to a premium discount by the insurer.
4. Combining properties on a portfolio policy: If you own multiple rental properties, try bundling them under one portfolio policy. This streamlines the admin and often unlocks a bulk discount from the insurer.
5. Paying annually: Paying the full premium upfront avoids the interest and administration charges that are applied when using monthly instalments. Your premium will be cheaper and the initial outlay for insurance will be reduced.

Paying one annual price for your landlord insurance is one of the easiest ways to reduce the insurance cost. But paying outright does mean having the necessary cash flow to cover this one-off cost.

Taking out a flexible loan, like an iwoca Business Loan, could provide the capital you need to pay the annual fee, with cash left over for maintenance on the property.  

Can I get landlord insurance for multiple properties?

Yes, if you’re a landlord or buy-to-let business with multiple properties to insure, you can take out landlord portfolio insurance to cover all your assets.

Portfolio policies can cover several properties under one schedule, often with better rates and simpler admin.

How to compare landlord insurance quotes

Getting the most relevant cover from your landlord insurance, and paying the best price for the bundle, is down to doing your research of the current UK market. 

Online comparison sites, like MoneySupermarket can be a good place to start, allowing you to get a broad overview of price and policy specs. 

Here are some other tips to aid your research:

• Like-for-like comparison: Compare factors such as rebuild cost, contents limit, accidental/malicious damage cover, trace and access, escape-of-water excess and the overall liability limit specified (for example, is the limit £2m or £5m?).
• Check exclusions/warranties: Check what exclusions and warranties are specified in the policy. Make sure you’re happy with what’s laid out regarding periods of non-occupancy, key security and leak detection, for example.
• Customer service and support: Read through the service line agreements (SLAs) for claims handling, how 24/7 emergencies are dealt with and what landlord-specific support is offered by the insurer. 

Types of landlord insurance and how to choose

It’s sensible to consult with a specialist insurance broker if your landlord business revolves around HMOs, short-lets or holiday lets. They’ll be able to suggest the most appropriate cover and can liaise with the insurer regarding the eligibility for listed or non-standard construction properties.

It’s important to understand the various permutations of landlord insurance that are available, so you know you have the most relevant cover for your property.

Examples of specific insurance types include:

• Single-let vs HMO cover: If you’re renting out an HMO with multiple tenants, you’ll need higher liability cover and will need to comply with the insurer’s rules and exclusions relating to the use of an HMO.
• Leasehold flats: Buildings insurance will often be provided via the freeholder, the owner of the land and fabric of the dwelling. However, as the landlord, you will still need contents, liability and loss of rent cover for your flat. 
• Short-let/holiday-let: Short-term lets will have different occupancy risks, so make sure you understand the cover that’s provided for damage by guests and the specified public liability coverage limits.
• Unoccupied property insurance: If the property is left empty during refurbishments or a period of non-tenancy, you’ll need to check if this affects any of your policy cover. You may need to add specific extensions.

The key to selecting landlord insurance is to match your cover to the particular tenancy type for your property. It’s also crucial to ensure the policy’s liability limits meet the requirements of your lender, so you can access a real estate mortgage.

If there’s a high risk of rent arrears from your tenants, it’s a good idea to add legal expenses insurance and rent guarantee cover so you have protection in place. 

iwoca: The fast, flexible way to fund your landlord insurance

Taking out landlord insurance is an essential part of your risk-management process and governance as a new landlord. 

An iwoca Business Loan could be the ideal way to ease your cash flow and provide the funds needed to pay your initial annual premium. By paying the annual price, you save money over paying monthly and have cash leftover to invest in the property. 

With an iwoca loan you can borrow from £1,000 to £1 million, with funds in your bank in less than 24 hours and no early repayment fees. 

Apply for an iwoca Business Loan

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