HMO Landlord Insurance: Everything You Need to Know

What is HMO insurance?

HMO landlord insurance is a type of specialist cover that helps protest house-in-multiple occupation properties. Regular buy-to-let policies will generally only give you cover for a let that comes under a single shorthold tenancy agreement.

Running an HMO can involve certain obligations, such as the number of facilities, room sizes and safety measures. This added responsibility comes with added risk, such as the chances claiming for buildings or contents damage. Therefore, bespoke HMO insurance caters for the nuances of HMO management.

Why do you need specialist HMO landlord insurance?

HMO landlord insurance differs from other types of insurance due to the extra risks associated with running an HMO. It is not the same as standard building and contents insurance used by owner-occupied properties to protect the home. But, it’s also not standard landlord insurance suitable for self-contained rental accommodation.

Because the property is shared by multiple households, more people are coming and going and therefore the risk of damage or issues is higher. There is also a higher chance that claims are made against you for loss, damage or injury while on your premises.

hmo landlord insurance

How much does HMO insurance cost?

HMO Insurance is designed to be more comprehensive than standard landlord policies, meaning that it tends to be more expensive. However, it gives you an extra layer of coverage and ensures you are adequately protected if you need to make a claim.

The exact cost will vary based on the size and location of your HMO, so we recommend comparing different policies to get a better gauge on the cost you might be looking at.

What does HMO landlord insurance cover?

What HMO landlord insurance covers generally depends on the insurance provider you select, so we always recommend reviewing their specific policy wording. However, as a general rule, HMO insurance should cover the following:

Buildings Insurance

This can cover the costs of any repair work that’s needed to fix your property after any damage occurs, caused by an event covered under the insurance. It will generally include protection against fire damage, storm damage, theft, floods and environmental damage. In some policies, you will also be covered for damage caused by tenants, or can purchase this as an additional extra.

Contents Insurance

In addition to buildings insurance, contents insurance can protect against damage to items such as furniture, fixtures and decorative items. This includes cover for any damage that occurs in hallways, communal areas and shared facilities like kitchens and bathrooms.

Loss of Rent

Some policies can cover loss of rent if your tenants have to move out due to the property not being inhabitable due to an event that has occurred, such as a fire or other damage. It can also help with the cost of accommodation should it be needed for your tenants.

In addition, you want to look for insurance that covers loss of rent due to tenants not paying.

Replacement Locks

Replacement locks insurance covers you if the keys to your HMO are lost or stolen, which is generally a high risk for HMO properties. Insurance should cover the costs associated with replacing locks and keywords.

Liability insurance

With HMO insurance, you should also have cover for public and employers liability as well as cover for legal costs associated with pursuing claims against tenants or visitors to the HMO property. Having lots of tenants is a great way to generate more income on buy-to-lets, but it can also increase the likelihood of liability claims.

Liability cover should cover you for any amounts you might become legally liable to pay, such as bodily injury or damage to the property caused by an accident happening at the property during the insurance period.

Things to Know About HMO Landlord Insurance

Below are a few things we recommend you know about HMO landlord insurance:

  • Do not buy HMO landlord insurance based on price alone. We recommend you take the time to go through the insurance wording in detail, so you know what is and isn’t covered. It really isn’t worth purchasing the cheapest cover in the instance that something happens in your HMO that would have otherwise been covered.
  • All HMOs should have HMO insurance cover, even if your property is not a mandatory licensed HMO. Whether you have 3-4 occupants or 6-10 occupants, you must have proper HMO cover.
  • Speak to HMO experts if you aren’t sure about HMO insurance. There can be a lot of mixed information online and speaking to someone who knows how it works can save you a lot of hassle down the line.
  • Engage with your insurance provider and get them to explain your policy throughly
  • If you have more than one HMO, sometimes it can be more cost effective to take out 1 policy that covers all your properties, rather than individual policies.
  • Ensure that any cover you take out covers all the main risks associated with running an HMO. This mainly includes the alternative accommodation cover, malicious damage buildings insurance.

How do I arrange HMO Insurance?

HMO insurance isn’t mandatory, but that doesn’t mean you don’t need it. Basic home insurance might not provide the cover you need if anything goes wrong with your HMO property. To help protect your property investment from damage, theft, and other risks associated with rental homes, consider investing in a policy that provides HMO cover.

For any and all advice about HMOs, reach out to the experts at HMO Designers. We help landlords and investors with all things HMO. We have a wealth of specific experience and know how to comply with local guidance & regulations, whilst maximising the property potential for yourself and your tenants.

Book a session with an HMO Expert