Buy to let insurance FAQs

The number of buy to let landlords in the UK reached a record high of 2.5 million in 2018 – a 5% increase over the previous year – according to the latest available figures.

They included full-time landlords, first-time landlords, so-called “accidental” landlords (who had inherited a property or who decided to let when faced with difficulties in selling a home), landlords with just a single property to let and those with a whole portfolio of properties.

But if all of those landlords share one thing in common, it is the need for buy to let insurance – to protect their investment in the bricks and mortar and against potential losses faced by the buy to let business they are running.

So here are some quick FAQs about buy to let insurance.

Am I obliged to have it?

There is no legal obligation for you to have landlord or buy to let insurance.

Without it, however, you stand to be very seriously out of pocket if there is significant damage to the property or its contents or you need to meet other financial losses from the business.

If you are the landlord of property which needs to be licensed by the local authority, the fact that you have appropriate landlord insurance may also support your application that you are a sufficiently “fit and proper person” – as required by the legislation.

What if I am buying the property with the help of a mortgage?

If you have a buy to let mortgage, your lender is almost certain to insist that adequate buildings insurance (covering at least the balance of your outstanding loan) is maintained on the let property at all times. Failure to arrange this insurance could see your mortgage lender demand that you repay the full mortgage balance immediately.

Will my regular home insurance suffice?

If you are letting a home in which you once lived – but have since moved on to a new home – you might be tempted simply to continue the regular home insurance that was previously in place.

If you do so, you may suffer a nasty surprise if you subsequently need to make a claim once the property is let and find that your cover is invalid, and the claim rejected.

Once tenants move in, any regular home insurance is likely to be invalidated and you need to replace it with the buy to let insurance that recognises such an important change of use.

What does buy to let insurance cover?

Buildings insurance

  • just as you might expect, the principal purpose of buy to let insurance is the protection of the structure and fabric of the building itself against a whole range of potentially serious risks – with a sum insured that is sufficient for completely reconstructing the premises in the event of a total loss;

Contents insurance

  • any contents of the let property you continue to own also need the protection of landlord contents insurance – with your tenants responsible for insuring their own possessions and belongings;

Compensation for loss of rental income

  • recognising that your property is essentially a business asset, buy to let insurance typically provides compensation for loss of rental income if an insured event leaves the accommodation temporarily uninhabitable;

Landlord liability insurance

  • as the landlord, you have a duty of care to take all reasonable precautions to prevent injury or property damage to your tenants, their visitors, neighbours and members of the public – on pain of substantial claims for compensation if you are in breach of that duty;
  • buy to let insurance typically provides indemnity against such claims.

Where can I buy landlord insurance?

Since landlord or buy to let insurance is an intrinsically specialist for of insurance cover, you may want to consult a specialist provider when buying it.