UK Landlord insurance for flats: What you need to know

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With the number of renters in the UK making up around 36% of all households , being a landlord is certainly a very lucrative gig if you can get it. However, like with most things in life the rental market comes with its own set of challenges and there are some risks that, as a landlord, you ought to be aware of.

Whilst there are some safety and maintenance requirements that you have a duty of care to, it is equally as important to protect yourself against damage or costs incurred by your tenants. This is where landlord insurance plays a role, and here we’ll break down all you need to know about landlord insurance for flats in the UK.

What is landlord insurance?

In short, landlord insurance is a specific type of policy designed to protect a property that is being rented out. It is important to note that landlord insurance is not the same as home insurance, as home insurance policies do not apply to properties that are being rented out (although you can still get contents insurance if you yourself are the renter!).

So what does landlord insurance cover? Well, landlord insurance can protect you against specific events such as loss of rent, malicious damage, damage to your property or its contents. With the average cost of landlord insurance in the UK being around £170 per year, it’s arguably a small price to pay and could save you thousands.

The type of property you are letting will also determine what type of cover you need and can affect the premium as well. Commercial property landlord insurance will differ from residential landlord insurance as there are different risks associated with operating a business than from tenants in their homes. Similarly, if you are renting out an individual flat as opposed to multiple flats in the same building, there are different types of landlord insurance you might want to think about.

Common types of landlord insurance for flats

Whilst landlord insurance is not a legal requirement in the UK, most buy-to-let mortgages require you to have it. Also, as mentioned earlier, it is definitely a sensible decision that could save you a lot of money in the long run. Here we’ve outlined the common types of landlord insurance for flats in the UK.

If you’re just looking to compare the best landlord insurance companies, don’t worry, we’re one step ahead of you and you can check out our review here.

Landlord buildings insurance

Landlord buildings insurance typically covers the cost to repair or replace the physical aspects of your building and any “fixed” parts of your property, such as the roof, walls, windows and door etc. Landlord Buildings Insurance applies if, for example, your flat is damaged or lost due to fire, flood, storms and events such as subsidence. Covered events will vary from policy to policy, but you can read about these in the policy wording.

Importantly, landlord buildings insurance will not cover the damage or loss of contents of the flat such as clothes, art or any electronics you might supply to your tenants. Instead, you might want to think about taking out landlord contents insurance (which we will talk about in a second) or a combined landlord buildings and contents insurance which will offer you this added layer of protection.

Lastly, buildings insurance will not cover the gradual deterioration of your flat and there are some common exclusions you ought to be aware of. These include rot, fungus, mould, wear and tear or claims due to war, government acts or any deliberate acts (e.g. you purposely setting fire to your property). The full list of exclusions is much longer, so be sure to brush up on your knowledge here to avoid getting caught out!

Landlord contents insurance

Unlike buildings insurance, landlord contents insurance only covers the costs of repair or replacement of the contents inside the flat that you provide for your tenants in the event of, say, a flood or fire. Any free-standing items such as sofas, beds, curtains and carpets are covered here.

But what about if you are letting out an unfurnished flat? Well, contents insurance is usually recommended as any white goods you provide for your tenants (e.g. fridge, washing machine) are all covered too. We all know how costly these can be to replace, and with the average cost of contents insurance starting from as little as £12 a month… It's well worth considering.

Landlord public liability insurance

Also known as property owners liability or simply landlord liability insurance, offers you financial protection if a tenant or visitor to your property suffers illness or injury and claims you are to blame.

Though it may differ from policy to policy, landlord public liability insurance will most commonly help with costs and expenses for legal representation, awards of damages cover (e.g. wrongful eviction), compensation for court attendance, safety legislation defence cover and data protection cover. The damages will be paid up to the limit of cover on your specific policy, with the most common limits being up to £2 million/£5 million.

Landlord rent guarantee insurance

Landlord rent guarantee insurance, also known as landlord rent protection insurance or tenant default insurance, offers you protection if your tenants stop paying rent. This essentially acts as a guarantee, meaning you will still receive your monthly rent payments even if your tenant is unable to pay you e.g. as a result of unforeseen circumstances such as Covid-19.

As well as covering rent, a landlord rent guarantee insurance policy will often cover legal expensesfor disputes (e.g. related to rent arrears or eviction) and access to solicitors who can provide you with legal advice.

There are some common exclusions that are important to be aware of, so do check the details of your policy carefully. These can include:

The type of tenant: Some insurance providers might exclude some types of tenant due to high perceived risk of defaulting on their rent. These could include those who are unemployed, students or on state benefits.

Deferral periods: Often, you will find you won’t be covered for the first month of rent arrears and also that you are unable to make a claim for a specified period of time after you take the policy out.

The defaulting tenant leaves: Regardless of whether you have found new tenants, if your defaulting tenant willing leaves your property or you successfully evict them, your payments will typically end.

You sell your property: Your rent guarantee insurance will essentially become void if you decide to put your flat on the market instead of finding a new tenant so do be careful here.

Contract disputes: If you and your tenant get into a dispute about the terms of your rental contract you will usually find any legal expenses will not be covered.

Insufficient referencing checks: You may find for most policies to be valid, you must have carried out satisfactory reference checks on either your tenant or their guarantor. These could include credit checks, employment and financial checks and previous landlord references.

It is important to always read the specific terms laid out in any policy you have taken, or are thinking of taking out. Whilst it may seem a bit tedious it could certainly save you from encountering any bumps in the road if and when you need to make a claim on landlord insurance.

Landlord loss of rental income insurance

Unike rent guarantee insurance, loss of rental income insurance covers monthly rental payments that are lost due to property damage that has rendered your property uninhabitable, meaning you are unable to rent it out as a result. You can check out the key differences between rent guarantee and loss of rental income insurance here .

Loss of rental income insurance applies in the event your property suffers physical damage from a fire, flood, theft or vandalism, to name a few examples. Whilst landlord buildings insurance will cover the costs to repair this damage, loss of rental income insurance will cover the rent you have lost as a result.

You might also find many loss of rental income insurance policies will also cover the costs of re-letting your property and any associated legal fees, but as always be sure to read the details of your policy carefully!

But what isn’t covered by loss of rental income insurance? There are some risks that aren’t often covered, these can include your property becoming uninhabitable due to vermin (e.g. rats, bees), if your property is unoccupied for extended periods of time, if your property is for sale or if the non-payment of bills has meant public services have been shut off.

Accidental damage insurance

Accidental damage insurance can protect your flat and the contents that you provide for your tenants from accidental events such as spillages or breakages. For example, if a glass of red wine is spilled on the carpet leaving a stain or if a tenant accidentally leaves a tap running causing water to damage the flooring or nearby electrics.

Accidental damage insurance is often purchased alongside buildings and/or contents insurance although some insurers do include it as standard within their policy. Similarly to buildings insurance, “accidental damage” does not cover the gradual wear and tear or items nor does it apply to items owned by your tenants. Insurers are also less likely to cover malicious damage by tenants.

Landlord emergency assistance insurance

Also known as landlord emergency repair insurance and landlord emergency cover insurance , will provide emergency assistance for landlords, for example if your properties plumbing, heating, drainage or power supply fails. Landlord emergency insurance will also apply if the security of your property is compromised (e.g. your doors or windows are damaged).

As well as helping towards the costs of essential emergency repairs and contractor call-out fees, landlord emergency insurance will also give you access to a 24/7 helpline so you can get advice and assistance whenever you might need it.

Depending on the policy, you can be protected for emergencies related to plumbing, drainage, home electrics, central heating, taps and toilets to name but a few. Of course, simpler plans that cover less of these are likely to be cheaper than more comprehensive plans and the average costs of landlord emergency insurance will be affected by many other factors too.

There are also some (rather surprising!) exclusions that many insurers do not cover, so important to keep these in mind as well and read your policy very carefully. For example, if the roof tiles of your flat have blown off in a storm most policies will only cover the costs of installing tarpaulin to protect the roof, rather than replacing the tiles themselves!

Legal expenses insurance

The final type of landlord insurance worth considering is legal expenses insurance , which will help cover the legal costs associated with taking a tenant to court, getting legal representation or if you simply need legal assistance. As much as we would all like to avoid disputes, they can and do happen, and you could find yourself facing some very high fees.

Legal expenses insurance will offer you cover up to £50,000 and can also cover you if your tenants claim you have breached any legal obligations you have as a landlord.

How much does landlord insurance for flats cost?

The type, age and size of flat can all affect the cost of your landlord insurance as well as the type of tenant and of course what policies you wish to take out. To make it easy for you we’ve researched and compiled quotes to give you the average cost of landlord insurance for flats in the UK.

The average cost of landlord insurance for a flat

Landlord Insurance for Flats Cost Calculation Estimates (per month)
Public Liability £2m + fixtures and fittings £2,500£11
Public Liability £2m + buildings cover £200,000£19
Public Liability £2m + buildings cover £200,000 + landlords contents £10,000£24
Public Liability £2m + buildings cover £200,000 + landlords contents £10,000 + accidental damage£28
Public Liability £2m + buildings cover £200,000 + landlords contents £10,000 + accidental damage + add ons£50

*^ Note: Average costs for a 1 bedroom flat in a medium sized UK town with a rebuilt cost of £200,000 Please note, different factors will affect these prices and you may find yours are higher/lower based on your circumstances

What can affect the cost of landlord insurance for a flat?

The cost of landlord insurance is sensitive to certain variables such as the age of your flat, rebuild costs, the location and even the type of tenant(s) that are renting it. Here we have included a few examples of common factors that affect the cost of landlord insurance in the UK, so bear these in mind when you are shopping around for the best deal.

The age of your property

You will find that older properties often have higher insurance premiums for landlord insurance, but why is this the case? Well, this reflects the fact that you are far more likely to have to make a claim for features such as plumbing or electrics as these are prone to wear and are more likely to develop faults over time.

Insurance companies associate far less risk with properties built more recently, say after the year 2000, as statistically they are built with better materials and things like the plumbing are less likely to become faulty or need replacing. This doesn’t mean buying a brand new flat to rent out is guaranteed to be problem-free, which is why taking out landlord insurance regardless of property age is a sensible idea!

Landlord Insurance for Flats Cost Calculation Estimates (per month)
Before 1850£41
1850-1889£41
1890-1920£39
1921-1944£37
1945-1979£36
1980-1989£34
1990-2000£33
After 2000£32

*^ Note: Average costs for a 3 bedroom flat in a medium sized UK town with a rebuilt cost of £400,000 and landlord public liability insurance up to £2million Please note, different factors will affect these prices and you may find yours are higher/lower based on your circumstances

The type of tenant(s)

As with property age, insurance companies associate certain groups of tenants with higher or lower risk meaning the cost of landlord insurance can vary greatly. Tenants who are employed or retired for example are seen to be inherently “less risky” and seen as less likely to fall into rent arrears due to having a stable source of income or savings.

However, “higher risk” groups such as those who are unemployed, claiming state-benefits and students are seen as less financially stable which can cause problems paying rent either in full on time resulting in higher premiums.

Landlord Insurance for Flats Cost Calculation Estimates (per month)
Employed/Self Employed£32
Retired£35
Unemployed/DSS£63
Student£69
Asylum Seeker£94

*^ Note: Average costs for a 3 bedroom flat in a medium sized UK town with a rebuilt cost of £400,000 and landlord public liability insurance up to £2million Please note, different factors will affect these prices and you may find yours are higher/lower based on your circumstances

Frequently Asked Questions

By law, you are not required to have landlord insurance if you are renting out a flat. However, if you are thinking of taking out a mortgage on a buy-to-let property, many providers require you to have this. Besides, as we saw throughout this article there are many risks associated with renting out a flat and these risks can be extremely costly!

With the average cost of landlord insurance in the UK being around £170 for a basic, buildings-only cover for a typical flat with a rebuild value of £200,000 it is certainly a worthy investment.

Firstly, it is important to understand the difference between “leasehold” and “freehold” in the property market.

Leasehold: you own the property (e.g. a flat) for a fixed period of time, however you don’t own the land on which it is built on. You will have to pay ground rent annually and when your lease expires ownership will then revert back to the freeholder.

Freehold: you own the property and the land on which it is built outright, meaning you maintain ownership until you wish to sell it on, if at all.

Whether you are a leaseholder or freeholder will determine what type of insurance you need to consider.

Typically, you won’t need to worry about taking out buildings insurance for a leasehold flat as this responsibility usually lies with the freeholder. This is because for a flat, the leaseholder does not own any communal areas such as hallways or stairs, nor do they own the structure of the building itself. As always though, make sure you are clear about the terms of your leasehold and discuss this with the freeholder if necessary.

However, the leaseholder (in this case a landlord) would be responsible for the contents they provide within the flat, so taking out landlord's contents insurance would be a sensible decision, as would the other types of insurance we have explained in this article.

If you are trying to insure multiple buy-to-let properties many insurance companies will offer you a discount, so it is definitely worth checking in with your landlord insurance provider to see what options are available to you.

There are many factors that affect how insurance companies calculate the cost of landlord insurance, many of which we have touched upon already. For a comprehensive comparison of the top 20 landlord insurance companies in the UK, click here .

There are many resources out there that you can use to get tailored quotes for landlord insurance. You can go directly to insurance providers sites such as Direct Line, or you can use comparison sites like Compare the Market or our partner QuoteZone .

If you own a commercial property that you are thinking about renting out, there are different risks you will need to consider protecting yourself against. To understand the fundamentals of commercial property insurance this page is a great place to start and will provide a lot of answers to any questions you may have!

Methodology

We sourced up to 10 of the cheapest landlord insurance quotes we could find and averaged them out for this study.

Our average costs of landlord insurance for a flat are based on quotes for a 1 bedroom 1 bathroom property located in a medium-sized town in the UK and a rebuild cost of £200,000. All other quotes (i.e. comparing property age and tenant) are based on the profile of a 3 bedroom flat, again located in a medium-sized town with rebuild costs of £400,000.

The quotes we received reflect the minimum level of landlord public liability insurance of £2 million, but of course you may find you need to pay more or less than our estimates based on your circumstance, the type(s) of insurance you take out and the insurance provider you ultimately choose.

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Emily Bunt

Emily is a psychology graduate from the University of Kent, currently working as a Data Analyst at NimbleFins focused on insurance content for SMEs. Prior to this she worked in market research at Kantar, investigating consumer behaviour and decision making, as well as in a supporting role in the field of mental health. Learn more at LinkedIn.

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The guidance on this site is based on our own analysis and is meant to help you identify options and narrow down your choices. We do not advise or tell you which product to buy; undertake your own due diligence before entering into any agreement. Read our full disclosure here.