Landlord insurance explained

As of June 2020 it’s estimated that one third of the British population live in rental properties. We’ve compiled this guide to help you either understand, or refresh your memory, around some key terms you will hear as a landlord shopping for insurance.

Accidental landlord

A time where you didn’t buy your property with the intention to rent it out but you’ve found yourself in a position where you need to.

Arrears

Late or unpaid rent that the tenant owes you, the landlord.

Buy to let

A property that you’ve bought (usually with a mortgage) with the intention of renting this property out as a source of income. 

Contents cover

This would apply to anything you own within the property that isn’t fixed or fitted there. For example, if your property comes furnished, any free standing furniture would need to be considered for contents cover.

Department for Social Security (DSS)

This department actually no longer exists within our government. But it is still seen within the rental property realm as it usually relates to whether or not a tenant can rent your property while claiming housing benefits. You may see the phrase ‘No DSS’ which would mean someone claiming this benefit can’t rent the property.

Energy performance certificate (EPC)

It’s a legal requirement to have this certificate when renting out your property. Your EPC shows how energy efficient your property is and a rating between A-G. Properties rated F or G must meet Minimum Energy Efficiency Standards (MEES) – see below.

England landlord register 

It’s not a nationwide requirement in England to register as a landlord as it in in NI, Scotland and Wales. But in some parts of England it is mandatory, so always check if you need to register your property with your local authority. 

Eviction

The enforced removal of a tenant from your property. This can be for a number of reasons including failure to pay rent or malicious damage to your property.

Fixed term tenancy

A contract between you and your tenant where the start and end dates are fixed.

Gas safety inspection

Inspections carried out every 10-12 months by a Gas Safe registered engineer. They inspect all gas appliances in your property to ensure they’re safe for your tenant. If the inspection is passed you’ll be given a certificate to prove this. 

Gas safety certificate (CP12)

A certificate given once a successful gas safety inspection has been carried out. It will have full records of all previous checks too. 

Gas safety record (GSR)

This is where the gas engineer that has performed your gas safety check will record the results. This includes any certificates (CP12) and any gas safety inspection failures.

Guarantor

This is usually a friend or family member of your tenant who has agreed to accept responsibility and pay for any missed payments or damage your tenant causes if they cannot pay for this themselves.

The Housing Health and Safety Rating System (HHSRS)

Your local authority conducts this for your property. They assess any risks and hazards your property may have, such as mould, fire risks, asbestos etc.

House in Multiple Occupation (HMO)

This would mean at least three people rent your property but are not from the same family so wouldn’t be considered one household. 

HMO licence

If you want to rent out your house as an HMO (as described above) you’ll need to contact your local authority for this licence.

Landlord liability insurance

Insurance that covers you against injury or damage claims relating to your property. We call this Property Owner’s Liability. For more information see our landlord insurance page.

Letting agent

A third party that can help you find tenants for your property, manage the contracts around the rental agreement and can in some instances also manage the property for you.

Loss of rental income cover

If your tenant has to move out due to something covered under your insurance policy, i.e flood or fire, this may lead to a loss of income. You may need to provide alternative accommodation for your tenant or stop charging rent while the property is being repaired. Luckily, in this instance we provide cover for loss of rent or alternative accommodation on all our landlord policies which you can increase up to £100k.

Malicious damage

A time where a tenant has intentionally caused damage to your property.

Managing agent

A third party (this can be the letting agency) that manages the tenancy and tenants for you. Tenant requests relating to the property and general inspections would then be handled by your managing agent.

Minimum Energy Efficiency Standards (MEES)

Applicable to all rental properties in England and Wales with an energy efficiency rating of F or G. Under government plans to lower CO2 emissions, it’s now illegal to let properties with an Energy Performance Certificate (EPC) rating below an 'E' rating.

Northern Ireland landlord register

It’s a legal requirement to be registered as a landlord to rent out your property in Northern Ireland, so you must join this register.

Permitted payments

These are payment you can legally charge your tenant, such as a refundable deposit for tenancy, payments to change the tenancy agreement, a charge for late payment of rent or early termination of contract.

Prescribed information

This relates to your tenants’ deposit under the Tenancy Deposit Protection which is a legal obligation. You must let your tenant know where the deposit is held.

Property inventory

This inventory ensures a documented record for you and your tenant describing the contents of a property and the condition of those contents. This inventory should be taken at the start of a tenancy and agreed by both parties.

Reference

Once your tenant is on board, with their permission you or your managing agent will conduct reference checks on their background and financial security. This may involve checking the tenant’s previous tenancy, credit checks, affordability checks and Right to Rent checks.

Rent Smart Wales

You must be registered with Rent Smart Wales as a legal requirement if you own a property that you rent out in Wales. 

Right to Rent

Applicable in England only. This is a government check to ensure your tenant is legally allowed to rent a residential property.

Scottish Landlord Register

To rent out your property in Scotland you must be registered as a landlord within the country your property is located. This is a legal requirement.

Subletting

If your existing tenant rents out all or part of your property to another person, this person would then be known as a ‘subtenant’. In most cases your tenant may need your written permission before they can do this, depending on your contract with them.

Tenancy Deposit Protection (TDP)

You must hold your tenant’s deposit within a government approved deposit scheme: Deposit Protection Service, MyDeposits or Tenancy Deposit Scheme.

Tenant

The person or people you rent your property to who are listed on the tenancy agreement.

Tenant referencing 

A legal requirement refers to verifying whether a tenant is right for you or your property. At a minimum, it involves a credit check. 

We have a guide on tenant referencing for landlords to answer any questions.

Wear and tear

This is damage or natural changes you may see in your property or its contents due to everyday use by your tenant.

White goods

You may hear this term referring to any large electrical appliances within your property like the fridge, dishwasher or washing machine.

It comes as no surprise that new landlords and more experienced landlords are looking for the best insurance to cover their rental property needs. Read more about our landlord insurance.