Tenant’s liability insurance

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What is tenant’s liability insurance?

When you start renting a property from a landlord, you become that property’s tenant. Under most tenancy agreements, the tenant becomes responsible for making sure the property and any contents it is furnished with do not get damaged while they are renting the property. If the property is damaged by you (the tenant) or your guests, or any of your landlord’s furniture is damaged, then you may lose part or all of your security deposit.

Tenant’s liability insurance can cover tenants for the cost of any accidental damage to a landlord’s fixtures, fittings, or furniture. This also includes white goods, showers, baths and toilets. You will not be covered for general wear and tear to the property, or for any malicious damage.

Do I need it?

You are not required to take out tenant’s liability insurance by law in the UK. There are many landlords however, especially those with furnished properties, who will insist that you take out liability cover before you sign a tenancy agreement. Landlords are entitled to set this requirement, so if you do not want to take out a policy then you may want to search for a different rental property.

Often, those with rental contents insurance will already be covered, so check your contents insurance to see if tenant’s liability cover is included.

How is it different to a tenant’s deposit?

Tenant’s liability insurance does not replace your security deposit. You will always need to provide a security deposit when renting a property. You should think of tenant’s liability cover as a policy that protects your security deposit, ensuring that you will receive your full deposit back at the end of your tenancy.

How much does tenant’s liability insurance cost?

The cost of tenant’s liability insurance will vary depending on which insurance provider you choose, as well as the size and quality of the property you are renting. Your insurer will also take into account the risk of insuring you, so factors such as your age, your credit rating, the location of the property and your rental history will also be important factors.

The price of tenant’s liability insurance will also depend upon the level of cover you want. For cover between £5,000 and £10,000, annual insurance prices tend to be between £50 and £150, with a £100 excess.

Make sure you compare home insurance policies when searching for tenant’s liability insurance policies in order to get the best deal for your needs and budget.

How to reduce risk

Whether you are thinking about taking out an insurance policy or not, there are a number of things you can do to reduce the risk of losing your security deposit:

• Keep the property clean: Hire a professional cleaner or introduce a cleaning rota with your flatmates.
• Careful use of white goods: Avoid silly damage to white goods by not putting anything in them that you shouldn’t. For example, overfilling washing machines or dishwashers,  or putting metal items in a microwave.
• Take care when decorating: If you wish to hang anything on the walls, make sure you have checked for water pipes and wires before you hammer in pins and nails.
• Stick to the rules: If the tenancy agreement bans pets or smoking then make sure you abide by the rules. If the landlord finds any damaged caused by a pet or from smoke damage, then you will definitely lose your deposit.

Should I think about tenant’s liability insurance as a landlord?

If you are currently a landlord, or are thinking about becoming a landlord, you might be thinking about making tenant’s liability insurance a requirement for new tenants. It can be a good idea if you are worried about damage to your property, or if you have any expensive furniture that you are concerned about. However, remember that attaching this requirement to a tenancy agreement can put tenants off, and may make renting your property out a lot harder.