HMO Insurance

You do not need to have an HMO landlord insurance policy by law.

Still, although you have no judicial obligation to purchase this kind of insurance for your property, you should consider purchasing a policy anyway.

An HMO landlord insurance policy can cover you if an insured risk were to occur and save you a lot of money. If you don’t have a policy, you would need to pay yourself. Whether you own one property or multiple buildings, this can become very expensive depending on the severity of the claim.

An HMO house is at a higher risk of a claim than other kinds of property.

This is because damages are more likely to occur when the property owners do not live at the address with tenants, than if they resided with renters.

Properties wear over time, and renters might pay less attention to maintenance concerns since they may view your property as temporary because they do not own the property themselves.

Therefore you may find yourself paying more for your landlord insurance than property owners renting out houses to smaller groups of occupants.

Insurers consider many different factors when generating HMO landlord insurance quotes for multiple occupation properties.

The top five conditions that will affect insurance quotes include:

1. The location of your HMO property.
2. The size of the property you are renting
3. The kind of tenants you’re renting to.
4. The kind of home you are renting out.
5. How many households you are renting your property to.

If you give your insurer all of these details, then they can provide you with an accurate quote for HMO landlord insurance. Don’t be afraid to shop around for the best deal.

Basic policies are significantly cheaper than full coverage landlord policies since they do not cover you from all types of potential incidents. However, you must decide if you prioritise saving money over coverage.

You can add features to a basic plan after assessing the risks and listening to the advice of your insurance provider.

Some of the most common additional features are:

Legal expenses coverage – This feature covers any legal fees you may incur in the event of a dispute. It is vital that you have legal expense coverage if you have an HMO property, as you may be subject to claims from multiple parties at once.

Rent guarantee insurance – This feature compensates you financially if the people you rent your house to do not pay their rent.

However, in order to receive financial compensation, you must have conducted financial checks on your tenants before making a claim. This can be an affordability or (more commonly) a credit check. Speak to your insurer to learn what information you need.

Loss of income insurance – If renters need to move out of your property due to an insured event, loss of income insurance covers lost income.

Alternative accommodation cover – If your agreement states that you must provide alternative accommodation to renters if they are required to live elsewhere due to an insured event, then this feature compensates you financially for this.

Since this can be expensive, it’s in your best interest financially to purchase this feature as part of your policy.

Unoccupied property insurance – There are obvious risks to any property standing empty. This kind of insurance protects your property even if there is no one living in it so you can sleep easily at night.

Home emergency coverage – This feature concerns household crises, including electrical shorts and plumbing issues. Some insurance providers also cover boiler repairs as part of landlord policies.

Accidental damage coverage– This feature allows you to repair any unintentional damage done to the property, reimbursing you for money spent on repairs.

This feature usually covers accidents like a tenant piercing a water pipe when hanging a picture frame, a tap left running that floods the bathroom, or a broken window caused by a child kicking a football. This feature does not cover intentional damages to buildings.

Malicious damage – If tenants cause damage to your property on purpose, then this feature compensates you for these damages. This is good to have, as you often don’t know your tenants’ true nature until there is a dispute.

This feature usually covers events like arson, broken furniture, and graffiti. If you need to make a claim for malicious damage to your buildings, you need to present your insurer with proof that the damage was caused with intent.

Employers’ liability coverage – Being a landlord is a business. And every business needs to make sure its employees are covered. Employers’ liability insurance would cover you financially if your employee is injured because of the work they do for you.

You need this feature if you contract a person to work for you caring for your buildings. If you do not have it, then you are breaking regulations put in place by lawmakers.

If your business is found to be violating these regulations, then you may receive a £2,500 penalty each day you do not have proper coverage.

Can HMO insurance cover more than one building? Yes!

If you have multiple HMO buildings, you can save money by insuring them all on one policy. This will also mean that you only have to deal with one insurance company and manage the renewal of one plan each year, make managing your landlord policy easy.