What insurance do landlords with Buy to Let mortgages need for rental properties?

Protection

Being a landlord of a Buy to Let property comes with financial reward but there are also risks involved. From tenants not paying their rent to property damage caused by burst pipes or fire, as a landlord you might face financial or legal issues if you do not have insurance to cover you. 

There are various types of insurance products that provide landlords with protection for a wide range of risks. Having comprehensive insurance to cover all eventualities gives you peace of mind that repairs or legal fees will be covered.

If you are a Buy to Let landlord, these are some of the insurance products available to choose from:

Buildings Insurance to protect the structure

Mortgage lenders will generally require proof of buildings insurance as a condition of a Buy to Let mortgage. Even if you do not have a mortgage on the property, buildings insurance is highly recommended, as it will cover damage to the structure caused by fire, floods, subsidence and escape of water. Many buildings insurance policies also cover malicious damage and damage caused by attempted theft.

Landlord Liability Insurance to cover legal risks

If your tenant or a visitor suffers an injury in your Buy to Let property, you could face legal action if someone claims compensation due to landlord negligence. Landlord liability insurance covers legal fees and any compensation in the event that someone attempts to sue you.

image showing hands protecting a house

Having comprehensive insurance to cover all eventualities gives you peace of mind that repairs or legal fees will be covered.

Rent Guarantee Insurance for safeguarding your income

Around 5% of private renters had arrears between 2023-2024, and many landlords struggle to cover mortgage payments if a tenant misses their rent. Rent guarantee insurance pays a guaranteed rent amount to landlords even if a tenant does not pay their rent. However, there are terms that must be met, such as conducting thorough tenant screening checks and the lender may require tenants to have a good credit score.

Contents Insurance - What’s covered inside?

Taking out contents insurance provides cover for damage caused to furniture and fittings owned by the landlord. For example, a carpet damaged by a water leak or furniture damaged in a fire. If you are providing a fully furnished rental property, with beds, sofas and appliances, contents insurance is highly recommended. This cover does not include items belonging to the tenant.

Do mortgage lenders require specific insurance?

Mortgage lenders will always require buildings insurance to cover the full rebuild cost of the property to protect their loan. Some lenders will also request that landlords take out liability cover, which is often included in the buildings insurance.

Having adequate insurance helps landlords to avoid financial losses and protects their investment. If you would like to discuss your insurance requirements with a professional protection adviser, get in touch with our team.