Landlord Insurance for a HMO
Landlord insurance is an essential part of running a HMO (House of Multiple Occupation).
HMOs are going through a period of rapid growth in the rental market, and landlords should ensure they have adequate HMO insurance to protect their property against any risks. HMO insurance covers multiple tenants living in the same house, so it provides peace of mind knowing that you're properly covered.
When looking for HMO insurance, there are a few key factors to consider.
Firstly, you need to make sure that the policy includes cover for damage caused by tenant negligence or wilful acts - this can include damage from vandalism or malicious behaviour. Additionally, check that the policy includes cover for loss of rent due to tenants not paying up on time. HMO insurance should also include cover for public and employers' liability, as well as any legal costs associated with pursuing claims against tenants or visitors to the HMO.
In terms of cost, HMO insurance is generally designed to be more comprehensive than a standard landlord policy, meaning that it tends to be slightly more expensive. However, this added level of coverage means that HMO landlords are adequately protected should they ever need to make a claim. The exact cost will vary based on factors such as the size and location of the HMO property, so it’s important to shop around and compare different policies available in order to secure the best deal
When running a HMO property, having adequate HMO insurance is an essential part of ensuring that the property and its tenants are protected.
Taking the time to shop around and compare HMO insurance policies means that landlords can be sure they’re getting the right policy for their HMO, at a fair price.
What is HMO insurance?
HMO means "house in multiple occupancy." HMO properties are shared by at least 3 people who do not live together but share communal facilities like a bathroom and kitchen. A 'household' is a family, people who are related to one another or in a relationship. HMO landlord insurance is specialist insurance for landlords who rent houses in multiple occupation.
With a HMO insurance policy, the terms are just slightly different than those of a typical landlord insurance policy. You will need to register your property as an HMO beforehand though. Once that's done, it functions quite similarly to a standard landlord insurance policy in that it can cover building repair costs, liability for property owners and risks created by tenants.
How much is HMO insurance?
The price you pay for HMO insurance as a landlord depends on various factors, such as how many units are in the rental property, its location, and what type of tenants will be living there. If you're an experienced landlord with multiple properties or blocks – like a block of flats – you can and should get discounts.
How does insurance for HMO properties differ from other types of insurance?
HMO insurance presents a considerably higher risk as there are multiple occupants, it requires that the premises must be the occupant’s main place of residence or used by students during term time. A property cannot be protected if it is not being occupied.
If my tenant doesn't pay rent for a period of time, can I file a claim?
Loss of rent insurance for HMO landlords is not a guarantee for rental income. Instead, it covers times when you cannot collect rent due to an active claim on your policy. If, for example, there has been damage to the property from an insured event like a fire and your tenants have to move out while repairs are being made, we may be able to cover the lost rent up to the value stated in your individual policy.
Can I filing a claim if my tenant(s) deliberately damages my property?
If one of your HMO tenants were to deliberately damage your property, you would need an additional policy to insure the damage. If malicious damage by tenants is something you are worried about, just ask your adviser for more information.
Why do you need specialist insurance that covers HMOs?
HMO landlord insurance is different from other types of insurance. It is not the same as the standard building and contents insurance used by an owner-occupier to protect his or her home. But it is also not the standard form of landlord insurance suitable for wholly self-contained rental accommodation.
This is a property that is shared by multiple households. This means there will be more people coming and going, which could increase the risk of damage to the property or contents. There is also a greater chance that someone could claim against you for loss, damage, or injury if they are on your premises.
Due to the extra dangers associated with HMOs, some insurers may:
-not insure you for an HMO at all
-if they do provide insurance, charge much higher premiums than for other types of property.
We offer HMO insurance that is effective and affordable. This insurance will give you the protection you need.
What are the inclusions of HMO insurance?
Different HMO insurance policies and providers offer different features, benefits, and terms and conditions. However, most HMO policies typically cover the following:
1. HMO buildings insurance – this covers the structure and fabric of the building, including fixtures and fittings, against damage from fire, flood, theft, and other hazards;
2. Landlord contents insurance – this protects any contents in your HMO property, including those in communal areas;
3. Landlord liability insurance – if someone is injured or suffers a loss on your premises, landlord liability insurance can help cover legal costs and compensation ;
4 . Unoccupied property insurance - for when the property is empty (for example, when student tenants are out of term time).
There are other coverages you can get for your home, either as part of your standard coverage or as an add-on. These include:
- Coverage for damage done on purpose (malicious damage)
- Accidental damage coverage
- Coverage for a place to stay if your tenants need to find somewhere else to live temporarily because of an insured event that makes the property uninhabitable
Check with your insurance provider to see what terms and limits apply to claims.