If your property is deemed an HMO, the terms of your insurance policy will be different from that of a single property, and so you will need a dedicated specific HMO insurance product to make sure you are fully covered. Here we run you through everything about HMO insurance so that you fully understand it.
What is HMO Property Insurance?
HMO Insurance is specific property insurance designed with residential multiple occupancy in mind and is tailored as such so as to best protect the HMO landlord.
HMO Landlord insurance protects you as the property owner from financial losses connected to the rental, such as theft, fire, or weather damage and can be extended to include coverage for things like unpaid rent and malicious damage by tenants.
Do I need HMO Insurance?
If you are operating a House in Multiple Occupation then YES.
While you are not under a legal obligation to obtain HMO landlord insurance, your mortgage lender may require that you do so. Equally, your HMO tenancy agreement may require certain responsibilities of you that are best served by an insurance agreement, especially if you want to avoid putting your financial future at risk.
Furthermore, if you haven’t already you will likely need to register the HMO property with the relevant local authority, and if you don’t do this you will likely jeopardise your HMO insurance cover.
What Does HMO Insurance Cover?
HMO Landlord insurance covers against risks related to your buy-to-let property and rental activity. Most policies start with building insurance and property owners’ liability insurance. You can add many other covers, such as loss of rent, tenant default or accidental damage, depending on your needs.
Different types of landlord insurance cover different risks. Buildings insurance covers the cost of repairing or rebuilding your property, while contents insurance covers your contents if they’re stolen or damaged.
When you’re buying a landlord insurance policy you can choose the insurance you need based on the risks you want to cover. Most landlord insurance policies include buildings insurance or fixtures and fittings insurance, plus property owners’ liability insurance. There are lots of other covers you can add on too, covering other risks like accidental damage, loss of rent and tenant default.
Landlord insurance does cover contents, as long as you choose landlord contents insurance when you’re buying your policy. If you have landlord contents insurance, household items like furniture and appliances will be covered in the case of events like theft, fire or flood. Bear in mind that your tenants’ belongings won’t be covered.
Landlord insurance does cover the building, as long as you have buildings insurance as part of your policy. Landlord buildings insurance can cover the cost of repairing or rebuilding your property if it’s damaged by something like fire, flood or vandalism. If you own a flat and the freeholder is responsible for buying the buildings insurance, you can just cover your fixtures and fittings.
Loss of rent
Landlord insurance can cover loss of rent, but it depends on the type of cover you’ve chosen and the reason for the loss of rent. Some insurance will cover lost rent if your tenants have to move out of your property because there’s been a disaster like a fire or a flood, as long as the disaster is also covered by your landlord insurance.
Loss of rent isn’t often a default landlord insurance cover: you’ll usually have to choose to add it when you buy your policy. And if you’ve lost rent for another reason – for example, your tenants have failed to pay – in most circumstances, you will only be covered if you have a specialist cover like tenant default insurance as part of your policy.
If you have landlord buildings insurance, your insurance can pay for repair or reconstruction of your building if it’s damaged by a fire. If you have landlord contents insurance, your insurance can pay to replace or repair your contents if they’re damaged by fire. Similarly, landlord fixtures and fittings insurance can cover your fixtures and fittings if there’s a fire.
Water damage is generally covered by landlord buildings and landlord contents insurance, but it usually depends on how the water damage happened. Water damage caused by a flood would usually be covered, and water damage caused by a ‘sudden and accidental’ event like a burst pipe would usually be covered too. However, water damage that’s been caused over a long period of time – a pipe or appliance that’s been dripping for many months, for example – wouldn’t usually be covered. Check your policy documents if you’re not sure.
Accidental damage insurance can cover the cost of replacing or repairing part of your rental property if an accident happens, for example, if a tenant spills wine on your carpet, or makes a hole in your wall when DIY goes wrong. However, the damage must be accidental: if your tenant damages your flat on purpose, this won’t usually be covered by your landlord insurance.
No, landlord insurance doesn’t cover tenants’ contents. If you include contents insurance in your landlord insurance policy, your contents will be covered, for example, any furniture and appliances that you supply to your tenants. If your tenants want to insure their contents, they’ll need to buy their own contents insurance policy.
HMO Property insurance usually covers compensation claims for tenant injury. Landlord liability insurance is a central part of most landlord insurance policies, and this is the cover that can pay compensation claims and legal fees if a tenant (or someone else) suffers injury or damage and you’re held responsible. For example, if a tenant tripped on a loose piece of flooring in the rental property and suffered an injury, you could be held responsible, and you could claim on your landlord liability insurance to cover the costs.
HMO Landlord insurance can cover some of the costs of evicting a tenant, as long as you have legal expenses insurance as part of your policy. This insurance can cover the cost of legal assistance if you need to evict a tenant, up to the limit of your policy. Legal expenses are included as standard with some landlord insurance policies, so check your documents if you’re not sure.
Landlord insurance can cover boiler breakdown, but usually only if you choose this option when you buy your landlord insurance policy. If you’re buying your landlord insurance from Simply Business, you need to add home emergency cover to your landlord insurance in order to cover boiler breakdown. Then, if the boiler in your rental property stops working, an engineer will be sent round to help. The cost of repairing your gas boiler will be covered, minus any excess and up to the limit of your policy.
Usually, landlord insurance will cover malicious damage caused by burglary or vandalism: landlord buildings insurance can cover your building if it’s damaged, and landlord contents insurance can cover your contents if they’re damaged or stolen. However, malicious damage caused by tenants isn’t usually covered under standard landlord insurance policies. You may be able to find a specialist cover for malicious damage.
If your property is damaged by a plumbing disaster – for example, a pipe suddenly springs a leak – the damage that’s caused to your property will usually be covered by your landlord insurance, as long as you have landlord buildings insurance and/or landlord contents insurance. However, the cost of fixing the plumbing itself usually won’t be covered by your insurance. You can opt to add extra insurance like home emergency cover to your policy, which means an engineer will be sent round if there’s an emergency like a plumbing problem or a boiler breakdown.
Landlord insurance can cover rent arrears, but usually only if you’ve added tenant default insurance to your policy.
How do I get HMO Insurance?
In the event of anything going awry with a property such as fire, burglary or another kind of damage it could be a good idea for landlords to take out HMO insurance. For those landlords that let out homes that have multiple dwellings within them like a flat with shared facilities, this could be specific HMO landlord insurance. Having this kind of insurance in place could prove vital in helping to cover financially any issues that may arise.
Finding cheap HMO landlord insurance quotes for a house of multiple occupancy may seem like a challenge but depending on the level of risk it may be possible. A landlord may find it easier to shop online for this kind of specialist insurance. It could be more convenient to do so and may mean being able to search for HMO landlord insurance at a time of their choosing. Using a comparison could give landlords the best chance of seeing quotes together and deciding at a glance which may be the best option for them. UK landlords looking to compare HMO landlord insurance may only need to enter a few details and then may find themselves quickly in touch with companies that could help them secure the most appropriate policy.
If you are buying an HMO it is important to remember that you need specialist HMO insurance that recognises the particular risks involved. If you are thinking about buying an HMO it is important to remember that you need specialist HMO insurance that recognises the particular risks involved, yet provides you with the cover you need at a competitive rate
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