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Landlord Insurance Versus Home Insurance: what's the Difference?

Insuring the home you live in is very different to covering an investment property that’s rented to others. While home and landlord insurance share some protections, specialised landlord policies account factor in unique risks facing property owners that don’t have occupant oversight. Understanding key contrasts between standard home versus tailored landlord insurance policies ensures your assets are protected against any unfortunate events.

Here, we’ll explain the difference between home insurance and landlord insurance, what these policies cover, and how to choose the right one for your situation. Let’s get started.

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What is home insurance?

Home insurance bundles protection for the physical structure of your home, the contents within, and often includes liability exposures into one convenient policy for owner-occupied properties. Most mortgage lenders require owners to have a home buildings insurance policy in order to secure a mortgage.

Building insurance specifically covers rebuilding costs if disasters like fires, storms, floods or burst pipes damage the physical property. This includes the walls, roof, windows, and permanent fixtures like kitchen cabinets and bathroom sinks. Outbuildings like garages and tool sheds also fall under this type of cover.

Contents insurance then handles the cost of replacing possessions within your home if they’re damaged or stolen. This covers furniture, appliances, clothing, jewellery, electronics, and essentially any personal items in the residence, often with limits per item. Core possessions coverage can only be used for thefts occurring inside the insured property itself.

Standard policies also include some liability shielding if a houseguest suffers injury onsite that the homeowner is legally culpable for. However, home insurance policies don’t cover things like gradual wear-and-tear, weather damage to fences, prolonged unoccupied periods, pest infestations, and damage from pets. These situations often require additional cover for full protection and peace of mind.

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What is landlords insurance?

Landlords insurance policies cover rental properties for many of the same disaster damages as standard home insurance, including:

  • Fire, smoke, lightning strikes, wind, hail
  • Water leaks, flooding, burst pipes
  • Fallen debris, vehicle collisions with structure
  • Vandalism and theft
  • Riot or civil disturbances

These types of protections bundle coverage for property disasters that both landlords and homeowners commonly need.

Additionally, landlord policies provide specialised coverage for unique rental property exposures that are beyond a standard homeowner's needs:

Loss of rental income:

Replaces lost rent for 12-36 months (options available) if the property becomes uninhabitable from a covered disaster during rebuilding. This prevents income disruptions when inhabitable rental conditions are restored post-crisis.

Tenant property damage:

Handles repair costs beyond normal wear-and-tear if tenants themselves cause damage to the interior's physical structure or permanent fixtures. Does not apply to owner-provided furnishings.

Liability protection:

Legally shields the landlord if injury lawsuits result from accidents occurring onsite that tenants then allege fall under the owner’s responsibility.

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Key differences between home and landlord insurance

While basic real estate coverage overlaps, landlord policies account for the greater risks faced when renting your property to third party tenants. Several key distinctions arise around income continuity, liability scopes, and intentional damages.

Home insurance focuses on covering a residence for your own living purposes. Alternatively, landlord insurance revolves around maintaining positive cash flow from real estate assets. As such, home policies lack provisions for replacement income when disasters temporarily halt occupancy. Landlord insurance contains loss of rent coverage to bridge income gaps under such scenarios.

Similarly, home policies cover slip-and-fall liability claims from house guests. But landlord insurance goes further protecting against litigious tenants alleging broader negligence from perceived safety hazards.

Home policies also only cover random vandalism damages from non-residents. Meanwhile, landlord insurance includes protections against tenant malicious acts like spray-painting walls or damaging fixtures during their stay.

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Choosing the right policy

Deciding between home or landlord insurance depends primarily on how you plan on using the property. Standard home policies suit private residences lived in directly by owners. Meanwhile, landlord policies are specially made for non-occupied rental assets and are best suited to investors letting to tenants.

It’s worth considering coverage limitations when weighing options as well. Home policies often require adding extras to handle risks like floods and freak weather incidents, while landlord policies typically include provisions for perils like loss of rental income already.

Evaluate your personal risk appetite around factors such as:

  • Whether you rely on rental income for expenses/bills
  • Risks presented by property location and prospective tenant behaviours
  • Potential liability arising from the property’s physical attributes and accessibility

Homeowners residing in properties they own need protection that prioritises contents and infrequent liability claims. Landlords that offset their mortgage by renting their property require safeguards tailored to consistency through business disruptions.

Making the right decision comes from accurately assessing unique exposure situations. Experienced insurers like Towergate quickly identify optimal protections custom fit for any home or rented property, so that the policy reflects the holder’s situation and works for them.

Once you’ve identified the coverage you need, securing essential safeguards doesn’t require any hassle. Towergate makes tailoring the right insurance easy and affordable. Our landlord policies offer coverage starting the same day and an online account dashboard to give you full control. Likewise, our home insurance includes contents cover up to £100,000 along with 24-hour service for any home insurance emergencies that may come up throughout the year. Getting a quote is straightforward too, just request a quote online or call 0330 808 8282

Whether an inherited family home, starter flat, or rented estate, the right insurance prevents unexpected high costs from becoming total financial catastrophes. Evaluate your situation’s distinct risks, yet keep coverage costs reasonable for realistic budgets. With coverage from Towergate, you can relax in the knowledge you’re covered against fires, floods, storms and everything in between. Get in touch today.

The information contained in this article is based on sources that we believe are reliable and should be understood as general information only. It is not intended to be taken as advice with respect to any specific or individual situation and cannot be relied upon as such.

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Landlord insurance from Towergate

We provide landlord insurance for a wide range of properties and tenants including multi occupancy, students, local authority placements, unoccupied and much more. See our landlord insurance webpage page or call 0330 828 1709 for more.

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About the author

Alison Wild Bcom Hons MAAT MATT Taxation Technician Commercial Tax Pensions Insurance And Marketing Specialist AuthorAlison Wild BCom (Hons), MAAT, MATT, Taxation Technician is a highly respected industry professional who has been working with and advising SMEs in areas including tax, pensions, insurance and marketing for over 25 years. She is a member of the Association of Accounting Technicians (AAT) and Association of Tax Technicians (ATT) and also has 20 years' experience as a residential landlord.