Protecting your investment: Why landlord insurance matters

When you let a residential property, the insurance that protects your own home is not designed for the risks you take on as a landlord. Standard home insurance policies are written on the assumption that the policyholder lives in the property. Collecting rent from tenants changes the nature of the risk, and most standard home insurance policies are voided or cannot be claimed against once a property is let. Landlord insurance, sometimes called buy-to-let insurance or property owner's insurance, is a specialist category designed for the specific circumstances of letting residential property.

Most buy-to-let mortgage lenders require landlord-specific buildings insurance as a condition of lending and ask for their interest to be noted on the policy. Even for unencumbered properties, specialist cover is worth understanding clearly.

Buildings insurance

The foundation of most landlord insurance policies is buildings cover. This protects the structure of the property, its roof, walls, floors, windows, and permanent fixtures such as fitted kitchens and bathroom suites, against a defined set of insured perils. These typically include fire, flood, subsidence, storm damage, and burst pipes. The cover limit on a buildings policy should reflect the cost to rebuild the property, not its current market value. Rebuilding costs and market values are different figures, and using the market value can leave a property underinsured if a serious claim arises.

Contents insurance

Contents insurance under a landlord policy covers the landlord's own possessions within the property: furniture, white goods, carpets, and other items you provide as part of a furnished or part-furnished let. Tenants' own possessions are not covered by a landlord contents policy. Tenants need their own separate contents insurance for their belongings.

Property owner's liability insurance

This covers the landlord's legal liability if someone is injured at the property, or if damage is caused to a neighbouring property, and a claim is made against the landlord. Legal costs and any compensation awarded are covered up to the policy limit. Most policies include a minimum level of liability cover as standard.

Loss of rent and rent guarantee: Two different things

These two types of cover are sometimes confused but protect against different situations. Loss of rent cover comes into effect when a property becomes uninhabitable following an insured event, such as a fire or flood. It covers the rental income that would have been received while the property is being repaired. Rent guarantee insurance, by contrast, covers lost rental income when a tenant fails to pay. It is a separate product that typically requires satisfactory tenant referencing before it can be activated. Many rent guarantee policies are also linked to legal expenses cover, which assists with the costs of possession proceedings if a tenant does not pay and cannot be persuaded to leave voluntarily. This has become a more commonly discussed cover element since the abolition of Section 21 in May 2026, as the Section 8 possession process involves legal proceedings.

What is typically not covered

Understanding exclusions is as important as understanding what a policy includes. Most landlord policies do not cover fair wear and tear, which is the gradual deterioration of the property through normal use. General maintenance costs are not covered. Damage by pests is commonly excluded. Policies usually restrict cover or require notification to the insurer if a property is unoccupied for an extended period, typically 30 to 60 days depending on the policy.

It is worth reading any policy wording carefully, or discussing specific requirements with a specialist insurance broker, before committing to a policy. The NRLA works with specialist landlord insurance providers and offers its members access to a range of policy options tailored to residential letting.

Talk to our lettings team about protecting your property