Whether you’re taking your first steps into the buy-to-let market or you’re shopping around for a new policy, our list of the 12 best landlord insurance policies should give you plenty of options.
Top 12 landlord insurance providers
- Alan Boswell – Landlords Property Owners
- AXA Business Insurance – Commercial and Residential Landlords Insurance
- Simple Landlords Insurance – Landlords Insurance
- Direct Line for Business – Landlord Insurance
- Just Landlords – Tenanted Property
- HomeLet – Landlords Insurance+
- Home & Legacy – Ultra Landlord
- LV= – Landlord Insurance
- Vasek – Tenanted Property
- Aviva – Residential Property Owners
- More Than Business – Landlords Insurance
- Saga – Landlord Insurance
The rest of the article explains everything you need to know about landlord insurance. Click the links to jump to the sections on...
- How we came up with the list
- What does a good policy look like?
- How much does landlord insurance cost?
- Why landlord insurance is important
- Rent guarantee insurance
- Does landlord insurance cover...?
- Airbnb, subletting and lodgers
- Why cheapest isn’t always best
- Landlord insurance reviews
How we came up with the list of the best landlord insurance companies
Our list of the best landlord insurance policies is based on ratings by an independent financial services review firm, customer feedback, the levels of cover provided by each policy and awards won by the company.
All of the policies in our list have been given top marks by the review firm, apart from Simple Landlords Insurance, which has three out of five stars but won the best insurance gong at the 2016 Landlords & Lettings Awards.
Some, such as Direct Line, have received additional accolades like the 2015 and 2016 What Mortgage Best Landlord Insurance Provider award.
We then looked at customer reviews on sites such as TrustPilot, Feefo and Reevoo. That feedback reveals whether the insurers are trustworthy and easy to deal with.
We also compared the levels of cover offered by each of the providers and took into account any discounts or extras a provider offers. Special deals and discount may be withdrawn at any point but they can be a deciding factor, especially between policies that are similar.
Direct Line says it will beat the price of any other insurer, HomeLet offers a 15% online discount and Saga has a 10% discount when you insure multiple properties.
What does a good landlord policy look like?
The policies on our list include many benefits as standard that are offered as optional extras by rivals. And the level of cover of these benefits is often higher than other insurers.
The broker Alan Boswell came top of our list because as part of its Landlords Property Owners policy it has agreed with NIG it offers cover for the following as standard: accidental damage to buildings, loss of rent, theft damage caused by tenants, malicious damage by tenants, unauthorised use of electricity/gas/water and white goods cover.
Also, it provides £5m of property owners liability cover, whereas many other providers offer £2m of cover and firms that didn't make the cut may offer even less.
Some big names such as British Gas, Simple Landlords Insurance and Endsleigh do not offer cover for theft damage caused by tenants and other useful policy features such as cover for the landlord’s contents are paid-for extras.
Alan Boswell won the 2014/15 Landlord & Lettings Awards Winners general supplier award and its landlord policy has a 92% satisfaction rating from hundreds of reviews on Feefo and 96% for customer service from over a thousand reviews.
Although Alan Boswell might not be right for all landlords, it offers a quality policy that others can be judged against.
How much does landlord insurance cost?
According to research from Alan Boswell, the average cost of landlord insurance is £230.
You can get a quote from Alan Boswell here to find out how much your landlord insurance will cost.
Bear in mind that this figure will vary depending on the type of property and where it is located, among other things.
Alan Boswell's research shows that the average price of rent guarantee insurance, which can protect your income if your tenants are unable to pay their rent, is £60. This includes legal expenses.
Alan Boswell also looked at the average cost for claims from tenants. For legal disputes, including the cost of evictions, the average claim cost was £1,726.60. For claims relating to the rent guarantee part of their policy, the average claim amounted to £1,758.
Remember that all of these figures will vary depending on the insurer and your own personal circumstances.
Why landlord insurance is important
The number of rented properties in the UK is increasing. The Guardian reported in 2015 that, “in the 10 years from 2005 the number of outstanding buy-to-let mortgages as a percentage of the whole mortgage market has almost doubled from 7.7% to 15%”.
While it’s not a legal requirement, landlord insurance will pay out to repair your property from unpredictable dangers like fire, flood and vandalism, it also gives you public liability cover in case one of your tenants injures themselves in your property.
Standard home insurance policies also offer these benefits but they are not suitable for rented properties because they won’t cover properties that are unoccupied for more than one month. Rented properties are a lot more likely to be vacant for longer periods so landlord insurance normally covers buildings left empty for up to three months.
Landlord policies may also cover you for loss of rent while no one is living in the property, the cost of rehousing a tenant if the rental property needs repairs, damage to the property caused by a tenant and legal proceedings relating to the property such as eviction.
Have a look at our article on unoccupied home insurance for more information.
The difference between buildings and contents cover
Like home insurance, landlord insurance is available as buildings and/or contents insurance.
A buildings policy covers the rebuild cost of the structure and built-in furnishings, such as kitchens and bathrooms, if they are destroyed or damaged. Contents cover is needed if you’re renting a furnished property or if you only own the leasehold of a building, in which case the freeholder should have a buildings policy.
Landlord insurance can be a little more complicated for leasehold owners. You will need specific landlord contents insurance to ensure you have cover for things like longer vacancies, but many providers only seem to offer a complete landlord policy that covers home and contents. Companies such as HomeLet have separate home and contents landlord policies that both offer public liability and loss of rent cover.
Leaseholders will also need to communicate with the freeholder to make sure the level of buildings insurance they have will cover any improvements you might want to make.
Some landlord insurance policies cover contents left in common or shared areas of buildings, which is particularly useful for leasehold owners. Ask your chosen insurer if they offer this cover.
Policy inclusions
Some policies offer rent guarantee insurance as standard, while it can be bought as an add-on for others. It protects against loss of income from unreliable tenants and covers rental income when the property is empty between tenancies. For more on rent protection, have a look here.
Legal expenses will cover your costs if you are involved in a legal dispute with your tenant.
Home emergency cover will pay out for repairs if your property's supply of gas, electricity, heating or water is disrupted, and help to get it fixed more quickly. It is a useful policy because it can solve common problems that need to be fixed quickly and may not count as an insurance claim if you use it. A number of companies such as More Than, Saga and British Gas offer separate landlord home emergency policies.
Agencies and tenants’ insurance
There is no legal requirement for tenants to have contents insurance but they may take out their own policy to cover their possessions. If you are renting a furnished property it might be that you and your tenants have separate contents policies.
If you are using a letting agency you will need to check they have professional indemnity insurance. That covers the agency in the event they are sued. They should also have Client Money Protection Insurance, which covers you if the agency runs off with the rent or deposit.
Rent guarantee insurance
Rent guarantee insurance is pretty self-explanatory - for a relatively low premium, it protects your income if tenants are unreliable with paying their rent. It also covers your income in void periods between tenants.
According to statistics from ThisIsMoney.co.uk published at the end of 2012: “The number of tenants in ‘severe’ arrears currently stands at about 99,000 tenants, the highest number since Templeton’s record begun in 2008.”
Rent protection also ensures there won’t be gaps in your income when the house is left empty between tenants.
Most of the providers on our list offer rent guarantee insurance, but the maximum amount of months they will cover can vary. HomeLet and Just Landlords will cover rent payments up to 12 months.
It’s important to note that rent guarantee insurance is different to cover for lost rental income, which protects your rent if the property becomes uninhabitable for the tenants due to damage from already insured against dangers such as flood, fire etc. A lot of insurance providers, such as Aviva and AXA cover this as standard.
Does landlord insurance cover...?
...DSS (housing benefits) tenants?
This is slightly complicated. Direct Line says it will not cover properties where all of the tenants are unemployed or claiming benefits.
However, it “might” cover tenants who claim disability benefits and it says: “We can offer cover if at least one tenant in the property, who has signed the rental agreement with you, is employed, retired, in full-time education or on disability benefits (subject to you also meeting our other acceptance criteria).”
Many companies will not cover tenants receiving DSS support so it is important that you check with any potential insurers.
Alan Boswell says it will cover properties occupied by unemployed tenants and those on housing benefits.
...Unoccupied properties?
Landlord insurance is not designed for long-term unoccupied properties. However, most landlord insurance policies will cover buildings left temporarily unoccupied, such as in between tenants, when the property is first acquired, or if it is being refurbished or redecorated.
HomeLet will insure properties left unoccupied for up to 90 days, while Direct Line states that “any cover provided would be subject to the property being occupied within 60 days of unoccupancy”, depending on the circumstances.
Just Landlords offers a specialist policy for unoccupied properties, with three levels of cover depending on whether or not the building is furnished.
...Boilers?
Generally, cover for boilers and heating is an additional extra, and not part of a standard landlord insurance policy.
HomeLet offers a boiler and heating option for an additional charge, which covers unexpected emergency breakdown. Direct Line offers cover for boilers as part of its buildings cover, which means that they will repair or replace your boiler if it breaks down, at no extra cost.
If you’re a leaseholder you may not need boiler cover because it can fall under buildings cover, which should be organised by the freeholder. This issue cropped up when Direct Line advertised its boiler cover service.
Airbnb, subletting and lodgers
Unfortunately, the insurance world hasn't quite caught up with Airbnb, and so standard home insurance policies tend to cover people who rent out their homes using Airbnb.
Landlord policies are also likely to be unsuitable for Airbnb cover, although some home insurance policies that cover traditional bed and breakfast properties may be appropriate.
Check out our guide to getting Airbnb home insurance.
While Airbnb does offer £600,000 worth of cover for damage to the property by guests with its Host Guarantee, this doesn't protect cash and valuables, or damage caused to shared or communal areas.
Airbnb has also introduced Host Protection Insurance. This can cover you for roughly £805,000 for third-party claims of injury or damage against you related to somebody staying in your property.
Luckily, Home Protect offers insurance for Airbnb hosts as part of its standard home insurance and Discount Landlord's cover also includes Airbnb.
Subletting
According to a study by the National Landlords Association, nearly half of subletting by tenants goes on without the landlord's permission.
Unfortunately, if your tenants are subletting your property without your knowledge it can invalidate insurance policies.
It’s important to have a good relationship with your tenants so you’re both able to discuss how they want to use the property.
Lodgers
You do not need a full landlord policy if you have a lodger, however, you may need an extension to a standard home insurance policy or specialist lodger home cover.
It is possible to increase home insurance cover by letting your insurer know you are taking on a lodger. Or you can look at lodger cover from the likes of Home Protect or Churchill.
Either way, it is important to get extra cover because taking on a lodger without letting your insurer know could invalidate your home insurance.
If you're looking for a home policy you should check out our list of the best home insurance companies.
Cheapest isn't always best
As with all types of insurance, if you're looking for comprehensive cover the cheapest policy isn't always the best one. We think it's better to choose a quality policy that offers far-reaching cover.
Our list of the top 12 landlord insurance policies isn't based on cost, but on expert and customer reviews, as well as levels of cover.
Landlord insurance reviews
Direct Line landlord insurance review
Direct Line offers separate buildings and contents landlord policies with a number of optional extras.
Cover for theft and malicious damage by tenants, accidental damage and loss of rent are extras, so adding them to your policy will increase your premium.
Its buildings and contents policies include alternative accommodation for tenants.
Direct Line offers cover for boilers as part of its buildings cover, which means as long as the fault isn’t due to normal wear and tear, you’ll be covered for the costs involved in repairing or replacing the boiler (up to your buildings sum insured). This is not a call out service, the cover is set up to pay for the costs involved in repairing or replacing your boiler.
As with all insurance policies, there will be a number of exclusions so it's worth checking the policy wording or discussing your needs with the insurer before you buy.
According to Direct Line, its landlord contents policy costs from £115 a year, based on 10% of customers who paid that price or less between January and June 2016.
Direct Line has won the What Mortgage Best Landlord Insurance Provider award each year since 2013.
It is rated 8.6 out of 10 from over 10,000 landlord customer reviews on Reevoo. However, most of those reviews are from people who have bought a policy but have yet to make any claims. Direct Line for Business, which offers landlord cover, scores 5.8 out of 10 from two reviews on Trustpilot. Direct Line insurance as a whole, which offers car, home, travel, pet and life cover, scores 2.3 out of 10 from 144 reviews on Trustpilot.
You can get a Direct Line landlord insurance quote on its website.
This article was independently written by Bought By Many. We were not paid to write it, but we may receive commission for sales that result from you clicking on a link to one of our partners.
