Landlord Insurance Explained - Why Accidental Landlords Can Be At Risk

Landlord Insurance Explained - Why Accidental Landlords Can Be At Risk

Property is seen as a sound investment – as safe as houses you might say!

According to research from our partners, LV=, Britain's love affair with property ownership has now spread firmly into the rental market, with one in twenty of British adults renting out a property to supplement their income.

Still, these so-called "Accidental Landlords" often put themselves in financial risk.

"Part-time" Landlord Boom

Low interest rates and recent changes to pension regulations are driving an ever-increasing number of us to turn to bricks and mortar for investment return.

LV='s research highlights an average monthly rental of £678, rising to £1,079 in the South East, equating to an astonishing £28 billion per annum across the UK.


What is an Accidental Landlord?

An increasing number of people are becoming Landlords by accident rather than intention, in fact, LV= report that 55% of property renters never intended to.  The key reasons for driving this trend are:

  • Moving to a new home and renting their original
  • Moving in with a partner and renting your current property
  • Work or job changes which mean a move, but the current property is retained

What Are the Risks?

Owning and renting a property brings with it a duty of care and responsibility for your tenants.  

Many professional and full-time Landlords choose to use the services of a Managing Agent to ensure that legislative requirements are met, and tenants are managed appropriately, as well as handling the tenant referencing and rent collection process.

However, nearly half (49%) of part-time Landlords choose to manage their rental property themselves, a decision which can be risky if obligations are not met or understood correctly, particularly if you already have a busy full-time job.

#1 Gas & Electrical Inspection

The Law dictates that any Let property must have Electrical and Gas equipment checked annually by a qualified engineer.

However, LV= report that 27% of Landlords (nearly 500,000) have not had a completed Gas Safety check in the last 12 months risking prosecution and a fine of up to £20,000.

#2 Let Property Insurance

Standard home insurance policies will not normally provide cover if the owner does not occupy the property.

If you choose to Let your property, you should look to arrange specialist Landlord Insurance to ensure that mortgage obligations are correctly met, and the property is fully protected.


LV= report than one-in-five people who rent out houses (over 400,000), do not have the correct Landlord Insurance in place.

Even if a standard home policy can be extended to allow renting, it is unlikely to include more specific perils such as Malicious Damage by tenants, which could leave you with a costly bill in the event of a loss.

#3 Property Owners Liability

Another critical area of difference between household cover and Buy-to-Let Insurance is the provision of correct property owners' liability.  

Typically, a home policy provides cover for legal liabilities following injury or damage to third party property as a direct result of your ownership of the home – for example, a tile falls from the roof and damages a car in the road, or hits a passer-by.

Where the property is let, legal liability extends to injury to tenants for which the owner could be deemed responsible.

For example, a tenant falls down the stairs as a result of a loose handrail or suffers an electric shock on a faulty socket.  

As such, the correct level of Property Owners Liability Insurance must be in place to protect your position.

FREE Property Insurance Review

Becoming a Landlord is a significant responsibility and understanding all your obligations in the first stage in the process.

The next step is to ensure you have the correct level of Property Insurance to protect you and your assets.

Insync specialises in all areas of property cover, you can Compare Landlord Insurance online via our website in minutes.

Alternatively, why not book a free review with one of our expert Gurus who can help you find the right level of cover at the right price!