Property Owners Insurance
Cover for buildings you own and somebody else occupies, whether that is one flat above a shop or a portfolio of them.
What Property Owners Insurance Covers
Property owners insurance is not landlord insurance by another name, although the two overlap. It is the cover a building needs when the person responsible for insuring it is not the person living or trading in it, and the thing that decides how it is written is almost never the building. It is the tenancy.
A three storey terrace is a straightforward risk let to a family, a harder one let room by room to five sharers, and a different risk again with a takeaway on the ground floor. Same bricks, three different policies, and getting that description wrong is the most common reason a property claim is reduced.
The Cover Most Of These Businesses Need
Buildings
The structure, on a reinstatement basis, which means the cost of rebuilding it today including demolition, site clearance and professional fees. Not the market value, and not what you paid.
Property owners liability
Claims from tenants, visitors and the public arising from the building itself. A loose stair rail, a falling slate, a trip in a communal hallway. Normally £5 million, with £10 million common on blocks and commercial.
Loss of rent
The rent you stop receiving while the property is uninhabitable after an insured loss, usually with alternative accommodation costs where you are obliged to rehouse a tenant. Set the indemnity period on how long a rebuild would really take.
Landlord's contents
Carpets, white goods, furniture in a furnished let, and the contents of communal areas. Small sums that are routinely left at zero on a policy written in a hurry.
Accidental damage and malicious damage by tenants
Often optional, and worth having on a let property. Malicious damage by a tenant is excluded as standard on many wordings, which surprises people at exactly the wrong moment.
Trace and access
The cost of lifting floors and opening walls to find a leak, which on a water escape claim is frequently larger than repairing the pipe itself.
Reinstatement Cost, Not Market Value
The single most common fault on a property policy is a buildings sum insured set to what the property is worth rather than what rebuilding it would cost. The two are different numbers and neither reliably exceeds the other.
Reinstatement cost is demolition, site clearance, materials, labour, professional fees and compliance with current building regulations, which is often where an older building becomes expensive. In parts of the country the rebuild cost comfortably exceeds the market value; in others a flat worth a great deal sits in a building that is cheap to rebuild. Guessing from the purchase price is guessing.
Rebuilding costs have moved sharply over the last few years, so a figure that was right in 2022 is unlikely to be right now. Where a sum insured is short, average applies and the settlement is reduced in proportion, on partial losses as well as total ones. A professional reinstatement assessment on anything substantial pays for itself the first time it is tested.
The Tenancy Decides The Policy
Insurers rate let property on who is in it far more than on the building. A standard landlord wording is written for a single household on an assured shorthold tenancy, and a surprising number of arrangements fall outside it.
Letting room by room makes it an HMO, which most standard wordings exclude and which may carry licensing obligations of its own. Letting to tenants in receipt of benefits, to students, or to asylum accommodation providers are all separate rating categories that have to be declared. Short term and holiday letting through a platform is usually a breach of a residential policy rather than a variation of it.
The point is not that any of these are uninsurable. They are all perfectly placeable when declared. The problem is only ever the undeclared change: a landlord whose circumstances shifted two years ago and whose policy still describes the arrangement they had before.
Empty Property Is Where Cover Quietly Narrows
Nearly every property policy restricts cover once a building has been unoccupied for a continuous period, commonly 30 or 45 days. It does not lapse, it narrows, which is more dangerous because nothing announces it.
What typically falls away first is escape of water, theft and malicious damage, which between them are most of what actually happens to an empty building. What usually remains is fire, lightning and explosion. Conditions arrive alongside: the water system drained, the property inspected at a stated interval with the inspections recorded, letterboxes sealed.
This catches people between tenancies, during a refurbishment, and after a probate sale. If a property is going to stand empty, tell the insurer before the clock runs rather than after something happens, because unoccupied cover is readily arranged in advance and very hard to argue for retrospectively.
Portfolios
Once there are several properties, insuring them one at a time stops making sense. A portfolio policy puts them on one schedule with one renewal date, which removes the gaps that appear when eight policies renew on eight dates and one quietly lapses.
It usually prices better too, because the insurer is rating a spread of risk rather than a single building, and it makes adding a property mid term an adjustment rather than a new purchase.
The schedule still has to be accurate per property. One portfolio, but the tenancy type, construction and sum insured are recorded building by building, and that detail is what the claim is settled against.
What Moves The Price
- Buildings sum insured on a reinstatement basis
- Tenancy type, which matters more than the building
- Construction, age, and whether the roof is flat
- Location, flood exposure and subsidence history
- Any period the property stands unoccupied
- Claims history, with escape of water looked at closely
We are a broker, so we take it to several insurers rather than quoting one. Call 02382 000820 for a realistic figure.
Let residential property
Buildings let to tenants, where the tenancy type drives the rating.
Landlord insurance
The general case: buildings, loss of rent and property owners liability.
Residential lets
Single household lets on an assured shorthold tenancy.
HMO insurance
Let room by room, which most standard landlord wordings exclude outright.
Blocks of flats
Freeholder and management company cover, including the communal parts.
Commercial and mixed use
Where a trade is going on downstairs, which changes the fire position.
Holiday, short let and empty
Occupancy patterns that standard wordings are not written for.
Cover that often goes with this
The gaps we most often find sitting next to this policy.
- Public liabilityHow property owners liability differs from the trading business version.
- Business interruptionThe commercial equivalent of loss of rent, and how indemnity periods are set.
- Guide: property owners insuranceThe longer read, if you want the background rather than a quote.
- Talk to a brokerTell us how each one is let and we will tell you what it actually needs.
Common questions
What is the difference between property owners insurance and landlord insurance?+
They overlap heavily and the terms are often used interchangeably. Landlord insurance usually describes cover for residential property let to tenants. Property owners insurance is the broader term, covering commercial units, mixed use buildings, blocks of flats and portfolios as well. If you let a shop with a flat above it, property owners is the more accurate description.
Should I insure for the market value of the property?+
No. Insure for the reinstatement cost, which is what rebuilding it would cost today including demolition, site clearance, professional fees and current building regulations. That figure can be well above or well below market value depending on the building and where it is. Using the purchase price is the most common cause of underinsurance on property.
What happens if my property is empty between tenants?+
Cover narrows once it has been unoccupied for a continuous period, usually 30 or 45 days. Escape of water, theft and malicious damage are typically the first to go, while fire and lightning remain. Conditions usually apply too, such as draining the water system and inspecting at set intervals. Tell your insurer before the period starts, because unoccupied cover is easy to arrange in advance.
Does my policy cover damage caused by tenants?+
Accidental damage is often an optional extension, and malicious damage by tenants is excluded as standard on many wordings. Both can usually be added. Wear and tear is never covered, and the line between wear and tear and damage is the thing most often argued about at claim stage.
Do I need to tell my insurer if I let on Airbnb?+
Yes. Short term letting to paying guests is usually treated as a breach of a standard residential or landlord policy rather than a minor variation, which can leave you without cover for anything rather than just for the guests. It is readily insurable when declared.
Can I put several properties on one policy?+
Yes, and once you have a few it is usually better. A portfolio policy gives you one schedule and one renewal date, removes the risk of one property quietly lapsing, and often prices better because the insurer is rating a spread rather than a single building. Each property is still recorded individually on the schedule.
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