Isn’t insurance just insurance? Not quite.
At first glance, landlord insurance and home insurance look similar. Both talk about buildings cover, contents protection, and liability. But beneath the surface they serve very different purposes, shaped by how a property is used. That distinction matters because relying on the wrong policy could leave you exposed at the worst possible moment. Renting to tenants carries risks that simply don’t exist when you live in the home yourself, and insurers draw a clear line between the two.
So the real question is: are you protecting a home for your family, or an investment property for your tenants? That difference changes everything.
What does home insurance cover?
Home insurance is designed for people who live in the property. It assumes you’re there day-to-day, spotting problems early and dealing with them quickly. The main focus is on protecting the building and your personal belongings inside it. Cover usually includes damage from fire, flood, storm, theft, or subsidence. Most policies also include liability if a visitor is injured while in your home.
Because insurers expect you to notice issues quickly, the risk is considered lower than with rented properties. Premiums reflect that assumption of attentiveness.
How does landlord insurance differ?
Landlord insurance is built for rental properties. Once tenants move in, the assumptions that underpin home insurance no longer apply. Tenants may not report minor issues until they turn serious, and they don’t have the same incentive to think about long-term upkeep. From an insurer’s point of view, that makes claims more likely and more expensive. Dedicated landlord policies exist to address those risks.
These policies cover the basics like buildings, contents (if provided), and liability, but usually go further. They may include rent default cover, legal expenses for evictions, and protection against malicious damage. In short, landlord insurance recognises the unpredictable realities of renting out property.
Key differences that matter
If you’re weighing up the two, here are the big differences:
- Occupancy: Home insurance assumes you live there. Landlord insurance assumes tenants do.
- Liability: Landlord cover extends to claims made by tenants and their visitors.
- Loss of rent: Landlord policies often pay out if your property becomes uninhabitable and tenants move out.
- Legal support: Evictions and disputes are typically included in landlord policies but not in standard home insurance.
- Damage: Malicious damage by tenants may be covered under landlord insurance but is usually excluded from home cover.
Why using the wrong policy is risky
It may be tempting to stick with a home insurance policy when you start renting out, but this creates real problems. If your insurer finds out the property is let, they may reject your claim or cancel the policy entirely. They insured you based on one type of risk, and renting changes that risk profile.
Imagine a tenant’s guest slipping on broken stairs. Without landlord liability cover, the legal costs could run into tens of thousands of pounds. Or picture a fire forcing tenants out for months. Without loss of rent protection, your income dries up just as repair bills arrive. These are the very moments when landlord insurance proves its worth.
The human side of the decision
Insurance isn’t just about numbers. Owning a rental property means balancing opportunity with risk. There’s the steady income, but also the constant “what ifs.” What if the boiler fails at Christmas? What if tenants stop paying? What if a claim lands on your doorstep? Landlord insurance doesn’t remove those worries, but it softens them. It gives you a plan for the worst-case scenarios so you don’t face them alone.
What does each policy exclude?
Exclusions are as important as inclusions. Home insurance usually excludes wear and tear, deliberate damage, or long unoccupied periods. Landlord insurance often excludes tenants’ personal belongings, gradual deterioration, or anything linked to poor maintenance. The principle is the same in both cases: insurers expect landlords and homeowners to take reasonable care of their property.
Are premiums very different?
Yes. Landlord insurance generally costs more than home insurance because the risks are higher. Factors like location, tenant type, rebuild cost, and property age all shape the price. While the difference in premiums might sting, remember that landlord cover includes protections that home policies never touch, such as unpaid rent or eviction costs. You’re paying for a wider safety net.
Real-life examples
Two scenarios highlight the contrast:
- Owner-occupied: You live in your house. A storm brings down a tree and damages the roof. Home insurance covers the repairs.
- Rented out: Tenants live in your house. A pipe bursts and floods the kitchen. They move out while repairs are made, and you lose three months’ rent. Home insurance wouldn’t cover that loss, but landlord insurance might.
Is landlord insurance required by law?
Not in the UK. But if you have a buy-to-let mortgage, your lender may require it. Even where it’s not compulsory, most landlords see it as essential. One serious claim could wipe out years of investment if you go uninsured.
Making the right choice
The rule of thumb is simple. If you live in the property, home insurance is right. If tenants live there, you need landlord insurance. Using the wrong policy is like hiking in flip-flops ; you might get away with it for a while, but when conditions get tough, you’ll wish you had the proper kit.
Final thought: different policies for different needs
Home insurance and landlord insurance may sound similar, but they serve very different realities. One protects your family home. The other protects your investment and the tenants who live there. Choosing correctly isn’t about red tape ; it’s about protecting your finances and peace of mind.
If you rent out property, landlord insurance is more than a tick-box. It’s recognition that being a landlord carries unique risks, and it’s better to face them with protection than without it.