Landlord Insurance vs. Home Insurance: Key Differences
Are you unsure which type of property cover you need? Having the right protection is vital if you own property. This guide explains the key differences to help you make the best choice.
The Main Difference
The basic difference between these two types of cover is about who lives in the property:
House property cover protects the house you live in yourself.
Landlord property cover is made for properties you rent out to tenants.
What Standard Cover Includes
Regular property protection usually includes:
- Buildings cover – This protects the structure including walls, roof, and pipes.
- Contents protection covers your belongings like furniture and electronics.
This works well if you live in the property yourself. But according to Admiral, if you’re renting it out, a standard policy won’t give you the protection you need.
What Rental Property Cover Includes
Specialist cover for rental properties offers extra protection for the risks that come with being a property owner who rents to tenants.
Here’s what this typically includes:
1. Buildings Insurance
This covers the costs if your property is damaged by:
- Fire
- Flood
- Storm
- Theft
2. Liability Cover
This helps if a tenant gets hurt on your property and you’re responsible.
3. Loss of Rent
If your property gets damaged and tenants can’t live there, your policy can cover your lost income.
4. Legal Expenses
This pays for legal costs from tenant problems, like evictions or chasing unpaid rent.
Key Differences at a Glance
| Feature | Standard Cover | Rental Property Cover |
|---|---|---|
| Buildings cover | ✓ | ✓ |
| Contents cover | ✓ (all belongings) | ✓ (only owner’s items) |
| Liability cover | Limited | Extensive |
| Loss of rent | ✗ | ✓ |
| Tenant damage | ✗ | ✓ |
| Legal expenses | ✗ | ✓ |
Who Needs Which Type?
It’s simple:
- If you live in the property, you need house and contents cover.
- If tenants live there, you need specialist rental property protection.
Special Cases
Renting Out Rooms
If you rent out rooms while living there too, standard cover might not be enough. Tell your insurer about this setup.
Renting to Family
Even when renting to family members, proper rental cover is still important. The risks remain the same regardless of who your tenants are.
Legal Requirements
While specialist cover isn’t always legally required, most mortgage providers demand at least buildings insurance for rental properties. According to Simply Business, not telling your lender about renting your property could break your mortgage terms.
Cost Considerations
Protection for rental properties costs more because it covers extra risks. But this higher price brings peace of mind knowing your investment is properly protected against loss or damage.
Many insurers let you claim online, making the process easier when problems happen.
FAQs About Property Insurance
1. Can I use standard cover for my rental property?
No, you need specialist protection. Standard policies don’t cover tenant-related risks.
2. Does rental property insurance cover my tenants’ belongings?
No, it only covers your fixtures and fittings. Tenants need their own contents cover.
3. What happens if my tenant damages my property?
Specialist policies can include cover for accidental damage and sometimes deliberate damage by tenants.
4. How do I know if my insurance covers everything I need?
Get a quote from a specialist who understands rental property needs.
Conclusion
The main difference is about who the property is for. Standard cover works for properties you live in, while specialist protection is needed for rental properties.
For property owners who rent to tenants, standard policies don’t offer enough protection. The extra features of specialist cover, like protecting against loss of rent and tenant-related problems, are essential for your investment.
To learn more about options for rental properties, visit our Commercial Property Landlord Insurance page or check out our Commercial Landlord Insurance solutions. If you need standard cover instead, see our House & Contents Insurance page.
With the right protection, you can only pay for what you need while getting complete peace of mind.