Landlord Insurance — What You Need and What It Costs

Updated March 2026 · 7 min read

Standard home insurance does not cover a property that is rented out. As a landlord, you need specialist landlord insurance — a policy designed for the specific risks of letting property to tenants. Getting the right cover protects your investment; getting the wrong cover, or no cover, can be financially catastrophic.

Why Standard Home Insurance Is Not Enough

Most home insurance policies explicitly exclude properties that are tenanted. If you let out a property with standard home insurance and make a claim — for fire damage, flooding, or a liability claim from a tenant — the insurer will likely reject it on the grounds that the property was occupied by tenants who are not covered under a personal home policy.

Landlord insurance is underwritten differently, with premiums and terms that account for tenant occupation, higher wear and tear, the risk of malicious damage, and the commercial nature of the arrangement.

Types of Landlord Insurance Cover

1. Buildings Insurance

This is the most important and, in most cases, the minimum you should hold. Buildings insurance covers the structure of the property — walls, roof, floors, fitted kitchens, bathrooms — against damage from fire, flood, storm, subsidence, and similar events.

If you have a mortgage, buildings insurance is almost always a condition of the mortgage. The sum insured should reflect the rebuild cost of the property (not the market value — rebuild cost is usually lower).

Typical annual cost: £150–£350 for a standard terraced house, depending on location, rebuild value, and claims history.

2. Contents Insurance

If you are letting an unfurnished property, contents insurance is largely optional — your tenants will insure their own possessions. If you are letting furnished, you should insure your fixtures, white goods, and furniture. Some landlord policies include basic contents cover for items like carpets, curtains, and white goods automatically.

Typical annual cost: £80–£200 for furnished properties, or included in a combined policy.

3. Property Owner's Liability Insurance

This covers you against claims from tenants or third parties who are injured on your property. If a tenant trips on a broken step or a visitor is injured due to a structural defect, you could face a significant liability claim. Most landlord insurance policies include £1–5 million of liability cover as standard.

This is non-negotiable cover. A single liability claim can run to six figures. Most combined landlord policies include it automatically.

4. Loss of Rent / Rent Guarantee Insurance

These are two different types of cover that are often confused:

Loss of rent insurance pays your rent if the property becomes uninhabitable due to an insured event — fire, flood, or major structural damage. If your tenant has to vacate while repairs are carried out, loss of rent cover pays the rental income you would have received during the repair period. This is typically included in buildings insurance policies.

Rent guarantee insurance is separate and covers non-payment of rent by your tenant — if they stop paying and you have to go through the eviction process. Policies typically cover up to 12 months of unpaid rent plus legal expenses for eviction proceedings. Most policies require a passed tenant reference check as a condition of cover.

Typical annual cost for rent guarantee: £100–£300/year, depending on rental amount and policy terms.

5. Legal Expenses Insurance

Landlord-specific legal expenses cover pays for solicitor and court costs if you need to recover possession of the property, pursue rent arrears, or defend a dispute with a contractor or tenant. This is often bundled with rent guarantee insurance or available as an add-on. Typically £50–£120/year.

6. Emergency Cover

Covers call-out costs for emergency situations — boiler failure, burst pipes, electrical faults — that require immediate attention. Useful if you are not near the property or prefer not to be on call. Typically £50–£100/year as an add-on.

Typical Total Costs

The total annual cost of comprehensive landlord insurance — buildings, liability, loss of rent, and legal expenses — typically runs:

How Insurance Affects Net Yield

On a £180,000 property generating £900/month rent, a comprehensive insurance premium of £350/year reduces gross annual income from £10,800 to £10,450 — reducing gross yield from 6.0% to 5.8% on that cost item alone.

In the context of all costs, insurance is typically one of the smaller line items — but it is non-negotiable. The absence of insurance in a claim scenario can dwarf the cost of years of premiums.

Tips for Getting the Best Value

• Compare specialist providers — don't use a general comparison site. Use platforms like Simply Business, Alan Boswell, or specialist brokers who focus on landlord policies.
• Check what your mortgage lender requires — some have minimum cover requirements.
• Review annually — the rental market changes and your portfolio grows. Do not auto-renew without comparing.
• Rebuild cost matters more than market value — insure for rebuild cost, not what you could sell the property for.
• HMOs and licensed properties need specialist cover — standard landlord policies may not cover HMOs. Check explicitly.

Key Takeaways

• Standard home insurance does not cover tenanted properties — you need specialist landlord insurance
• Buildings insurance and liability cover are the essential minimum; loss of rent and legal expenses are strongly recommended
• Rent guarantee insurance covers tenant non-payment — separate from loss of rent insurance
• Typical comprehensive cover costs £200–£500/year for a standard buy-to-let house
• HMOs require specialist policies and attract higher premiums
• Insurance is a fully deductible expense against rental income for tax purposes