Partners and Suppliers Steve Barnes 03/05/2024

8 reasons why you need landlord insurance

Landlord insurance is not a legal requirement, so many landlords think it’s an unnecessary expense. However, as a landlord it is vital that you take out residential landlord property insurance, as normal home insurance policies may not be valid. This is something many landlords are unaware of. The reality is that if you let to tenants without dedicated landlord insurance, you could find yourself out of pocket if your property is left uninhabitable by tenants.

Also, if you have a mortgage on your rental property, it’s important to check the terms of the agreement. Lenders usually require landlords to take out a specialist landlord insurance policy. In this guide, NRLA insurance partner, Total Landlord, explains some of the key reasons why you need landlord insurance, and how to choose the right landlord insurance to meet your needs.

Are you one of the 14% who don’t have landlord insurance?

It will come as no surprise that we consider landlord insurance a must-have. But according to our recent good landlord quiz, 14% of landlords still don’t have landlord insurance. A crucial aspect of managing your risks as a landlord is having dedicated landlord insurance. Even if you only have one or two properties, it’s vital that you protect yourself from any financial losses. So, if you’re one of the 14% who still don’t have landlord insurance, don’t forget to arrange cover as soon as possible.

Almost a quarter of those who responded to our quiz have had to claim on their landlord insurance, with the majority of claims being for ‘escape of water’ (43.5%), followed by storm damage (17%) and malicious damage (12%). But do these statistics reflect the reality of renting out your property? And what are the unexpected problems you need to protect your property from with landlord insurance?

Many unforeseen circumstances can endanger your investment, so you need to make sure your policy protects your property from them all. Here are eight you may not have considered.

Eight reasons why you need landlord insurance

1. Escape of water 

As our quiz results suggest, escape of water is consistently the most common reason why landlords make an insurance claim across the UK. Over a third of all claims paid out by Total Landlord are for escape of water. This means water damage coming from leaking pipes or fixed water tanks, baths, sinks or toilets, or a leaking dishwasher or washing machine, but not flooding from external sources. Around three quarters of escape of water claims at Total Landlord are down to a burst pipe.

The Association of British Insurers reports that the average cost of repairs caused by a burst pipe during freezing weather is £8,800. However, even a small pipe fracture can release huge volumes of water if left unchecked, sometimes resulting in repair bills for £100,000+ for water damage to buildings, contents and drying out.

The average claim paid out by Total Landlord between 2019 and 2023 was £2,596, but claims are often much higher than this. One recent claim was settled at an eyewatering £82,889 after a water tank burst while tenants were on holiday.

Regular maintenance to reduce your risks should include servicing of the property’s boiler, fixing dripping taps, and checks of leaking radiators, washing machines, dishwashers, toilets, or sinks. Insulating pipes can prevent them from freezing over in colder weather and potentially bursting. But even landlords who do all they can to maintain and protect their properties cannot eliminate risks entirely, which is why landlord insurance is a must. 

Find out more about how to reduce your risks of burst pipes in Total Landlord’s NRLA guide to preventing burst pipes in your rental property.

2. Storm damage 

Over the past few years extreme weather events such as named storms have become more common, causing trees and other objects to crush properties, loosen roof tiles and lead to flooding. Increasingly, property owners across the UK are suffering uninsured losses due to gale-force winds and floods, and scientists predict that climate change is likely to lead to more storms as sea levels rise.

Total Landlord received 559 storm damage claims between January 2019 and December 2023, and in 2020, we saw a 95% increase in storm claims compared to 2019. The average claim amount between January 2019 and December 2023 was £4,415 – this has risen by over 50% compared to the period January 2014 to December 2019. But claims for storm damage can run into tens of thousands of pounds. The highest claim paid out over the last five years was for £93,020, following storm Eunice in February 2022.

Simple maintenance like clearing gutters, downspouts and drains to prevent overflow in bad weather can reduce damage during storms. It’s also important to inspect the roof of your property and replace any loose or cracked tiles, check your chimney for cracks and loose bricks, maintain fences and inspect trees regularly. While preparation is vital, it’s no substitute for having landlord insurance in place – between January 2019 and December 2023, 66% of storm claims were for roof damage.

Find out more about how you can prepare your rental property to limit the impact of storms and severe weather with Total Landlord’s NRLA guide to protecting your property from storms.  

3. Landlord liability

Landlord liability insurance is an insurance cover that protects you from compensation claims related to your rental property if, for example, someone injures themselves or other property is damaged as a result of your property. It is a type of public liability insurance that is there to pay the compensation and any resulting legal fees to a third party such as a tenant, visitor or a tradesperson. This could be something like a visitor tripping over loose flooring, or if leaking pipes cause damage to a tenant’s belongings. Compensation for such an accident could be expensive, so landlord liability insurance is a cover that would step in to pay for any related compensation, expenses and legal fees up to the limit of your policy.

Insurers and their solicitors will also defend you against claims where a third party has alleged that you are at fault, but you haven’t actually been negligent. In this scenario they will try to defend you and, if they find that you are not negligent for any injury caused, they will provide cover for the defence costs required to defend the claim on your behalf.

While of course you can and should minimise your risk with regular maintenance and by asking tenants to inform you of any problems as soon as possible, you can’t eliminate risk entirely. Liability claims can run into millions of pounds - for example if a tenant had an accident on your property that caused a life changing injury, you could be liable for medical expenses and loss of income for the rest of their lives. Fortunately, liability cover is standard in most landlord insurance policies, but it’s important to check.

Our NRLA guide to landlord liability insurance explains landlord liability insurance in much more detail.

4. Subsidence 

Subsidence is a serious problem that can jeopardise the safety of your property. It’s caused by the ground beneath your property sinking, pulling the property’s foundations down with it, causing them to become unbalanced and shifting the walls and floors, leading to cracks and potentially destabilising the construction of the property. Subsidence can be caused by hot or dry weather leading to soil shrinkage, or by wet weather and poor drainage that causes softened soil to be washed away. It can also be caused by trees and shrubs disrupting housing foundations. 

Damage caused by subsidence can be very expensive to fix. Our most expensive claim ever at Total Landlord was for a staggering £348,703! Fortunately, subsidence claims have dropped considerably since then. Based on the last five years (up to the end of 2023), the highest claim has been for just over £30,000 and the average claim during this period was £7,385.

The key thing with subsidence is to take action straight away, taking time-stamped photos and contacting your insurer. While it may be tempting to ignore the signs, the longer you leave it, the more expensive your repairs will probably be. 

Look out for larger cracks that are visible both internally and externally, or around doors and windows. Diagonal cracks that grow in size as they move away from the ground and cracks where an extension meets the rest of the property can also be signs of subsidence as opposed to settlement. 

Subsidence is a complicated issue – find out more with our NRLA guide

5. Underground services 

Although underground services claims are not common, they can be costly. Many property owners don’t even realise that they’re liable for the repair costs of the underground services that run from the street to their property. In fact, landlords are responsible for the repair of any sewer, piping, communication and electrical lines connected to their property.

Because pipes are underground, damage only tends to be discovered when it is advanced and expensive to fix, so it’s important to make sure underground service cover is included in your insurance policy. 

Always advise tenants not to flush nappies, sanitary towels or wet wipes - in fact anything other than human waste and toilet paper - down the toilet. Blockages aren’t covered as part of underground services policies.  

The majority of underground services claims (93%) are for collapsed drains, with one recent claim for this costing £68,805. Only around three per cent of all our claims are for underground services, but when they do happen the damage caused is often very disruptive and costly to repair.

You can prevent damage to underground services by making sure tenants know to report any problems to you immediately, and through regular maintenance – clean out drains and have them professionally checked annually and remove any tree roots growing near drains.

Check out our NRLA guide to protecting your property from damage to underground services for more information. 

6. Rehousing costs/loss of rent

Buy to let property investment is ultimately about making a profit. So, what happens if an event like a fire or a flood means your tenants can’t live in your property? As a landlord you’re running a business, and you are dependent on rental income to make a profit.

Loss of rent insurance enables you to claim back lost income if your rental property becomes uninhabitable due to an insured event and your tenants are forced to move out.

Your property can be deemed ‘non-tenantable’ due to an insured peril such as a kitchen fire putting the kitchen out of order. Due to the lack of kitchen facilities, the property would be considered uninhabitable, and the landlord would lose rent. 

Perils usually include fire, flooding, lightning strikes and theft, and your insurance policy should list these. If emergency services or local authorities deny you access to your property, you have to comply as any decisions are taken as a matter of public interest to prevent danger or risk. 

This is often referred to as ‘denial of access’ and includes access to your building being denied by police, fire service, ambulance or government and law authorities because of a peril.

In addition to paying for any repairs required due to an insured peril, a comprehensive landlord policy would pay for loss of rent in the event of a tenant having to move out, and for alternative accommodation if you have leaseholders in the property. 

7. Accidents and malicious damage in between tenancies 

Whether you have tenants in your property or are between tenancies, landlord insurance is a must. If property is damaged or there is an accident on your property while it is vacant, not only will you will need to pay to repair the damage if you don’t have insurance, but this could cause a delay moving in new tenants, increasing the void period during which you won’t be receiving any rental income. 

Total Landlord provides full cover between tenancies for up to 90 days subject to policy terms and conditions. Other policies may cover shorter periods so you need to bear in mind that how long the property is empty might impact whether you're covered. This is also something to be aware of if you’re renting to student tenants, who may leave the property unoccupied during the summer months.

8. Contents

While landlord building insurance will cover the physical property for the financial cost of repairing structural damage including the floors, walls and roof, contents insurance covers the landlord’s contents such as furniture, freestanding appliances or garden equipment. Landlord contents insurance covers the cost of repairing or replacing items that you’ve provided for your tenant to use during the tenancy. While not essential, it will protect you from accidental damage to glass and sanitary fittings, which would be expensive to replace.

When deciding whether to take out landlord contents insurance, you need to assess the risk involved by considering the age and cost of any contents in the property and how much it would cost to replace them. For furnished or part-furnished properties, landlord contents insurance is a must. Remind your tenants that it’s their responsibility to take out their own contents insurance to cover their own belongings, as your landlord contents insurance does not cover any possessions they bring into the property.

Landlord insurance checklist

Residential landlord building and contents insurance will protect you and provide you with peace of mind knowing that you’re covered should anything unexpected happen. But how do you work out which is the best landlord insurance cover for your needs?

We’ve put together a checklist of what we offer, to help you make sure you get the best landlord insurance cover for your needs when comparing buy to let insurance with other providers:

  • Accommodates all types of tenants (subject to the landlord having full control and an assured shorthold tenancy agreement in place) such as benefit recipients, students, retired people and professional tenants – with no difference in cover or price
  • Provides full cover between tenancies for up to 90 days subject to policy terms and conditions
  • Theft cover including by tenants and their guests
  • Offers loss of rental income or alternative accommodation up to 30% of the rebuild value with no time restrictions
  • Includes public liability with a minimum of £5,000,000 limit of indemnity
  • Includes a tenants subrogation waiver
  • Has an in-house claims team with authority to make payments on behalf of insurers
  • Has a team that is trained to provide an advised sale, and can offer tailored guidance on what cover a landlord needs based on their own requirements

In this video, Total Landlord’s Founder and CEO, Eddie Hooker, provides an overview of the different features of landlord insurance. Find out more about how to choose the best landlord insurance policy for your needs in our guide to finding the best landlord insurance for you, or for a competitive quote and to discuss your insurance needs call 0203 907 1779 or get your landlord insurance quote online.

Voted by our customers, Total Landlord has won six insurance choice awards. Our commitment to excellence is reflected in the trust and satisfaction of our customers, making Total Landlord the top choice for reliable and acclaimed landlord insurance.

With over 25 years’ experience, recommended NRLA insurance partner, Total Landlord, is powered by Total Property – dedicated home to specialist property products and services, bringing together all the support and advice that you need to become a better landlord.  

Steve Barnes

Steve Barnes Head of Broking, Total Landlord

Steve Barnes has worked with landlords and leading landlord associations for over 25 years and oversees the HFIS group as Head of Broking for Total Landlord. Our award winning landlord insurance offering has been providing comprehensive cover for landlords since 1996. Whether you have a single property or a portfolio, Total Landlord has a property insurance policy that will give you value for money and the required protection to support your business requirements. Our dedicated claims team of expert advisers deal with more than 82% of claims in-house and provide customers with a sole point of contact should the worst happen. Named 'Best Landlord Insurance Provider' five times at the Insurance Choice Awards and with a rating of 4.8 out of five on Smart Money People, you can rest assured that you are in safe hands.

See all articles by Steve Barnes