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HMO Insurance

HMO Landlord Insurance

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HMO Insurance

What is HMO insurance?

Landlord HMO insurance is a specialist rental property insurance for landlords renting a single property to multiple tenants from different households. These are tenants who are not related but share communal areas like the kitchens and bathrooms. They also consider the property to be their main place of residence. The properties themselves can be anything from a block of flats with communal areas, student accommodation, or houses converted for multiple occupancy.

Why do you need HMO cover?

HMO properties carry much higher risks and complications compared to single-let homes. Because HMO properties have multiple tenants, the risk of accidents and malicious damage goes up significantly. There’s also more wear and tear. Disputes can be difficult to sort out, and if they go the legal route, it can be costly. HMO landlord policies are geared toward these risks. Standard home insurance policies could be missing coverage for the unique risks of HMO properties.

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What does HMO landlord insurance cover?

Landlord insurance for a HMO can vary from insurer to insurer. They weigh risks differently. Some may include certain risks as standard, while others require you to take out additional cover. That’s why it’s important to shop around using a platform like Quotezone. Here are some of the risks that a HMO policy might cover. 

Contents insurance

Loss of rent

Alternative accommodation

Replacement locks

Unoccupied property insurance

Legal expenses

What is excluded from HMO protection?

HMO homes carry a higher risk to insurers. To mitigate their potential losses, they may require you to have proof of regular maintenance, a valid HMO license, and tenant checks. Without these, you might not be paid out if you make a claim. Other risks they typically don’t cover are:

Wear and tear or deterioration over time

Poor maintenance

Breakdown of appliances or systems

Tenant’s personal belongings

Landlord negligence

Fire not originating from the kitchen

Damage by pets, vermin, or pests

How much does HMO cover cost?

HMO property insurance costs are usually tailored to each case, so they’ll be different for everyone. However, there are common factors that insurers use to determine premiums.

Location

Crime rates and flood zones are important.

Property

The size, type, age and condition of the property.

Tenant profiles

You might pay more for students and DSS tenants.

Claims history

A history of claims can increase your premiums.

Unoccupied periods

This varies between policies, but some insurers offer cover for up to 45-90 days. Beyond that, you’ll need additional cover.

Additional add-ons

These offer more protection, but they’ll cost you more.

How do I get cheaper HMO protection quotes?

HMO landlord insurance could be more affordable if you take advantage of these strategies.

Screen your tenants carefully

Higher-risk tenants could cost you more.

Maintain your property regularly

Keeping up with repairs can reduce your number of claims.

Enhance security and safety features

This includes alarms, cameras, secure locks, as well as fire doors and smoke alarms.

Pay annually

Monthly payments typically cost more.

Increase your excess amount

A good option for low-risk properties, as your premiums will typically be lower.

Bundle policies

Insurance premiums for landlord insurance can potentially be cheaper when you bundle various policies into one. This can be particularly relevant if you have multiple rental properties.

Compare quotes.

Our platform lets you to source multiple quotes to compare. We recommend that you only take the extras you need to avoid escalating costs.

HMO insurance FAQs

Do I need a special policy for an HMO?

You are required to have an HMO licence for these properties. However, you’ll only typically be required to have specialised insurance if you have a mortgage. Besides that, it’s at your discretion. However, it is highly advisable to take out this insurance if you have an HMO property due to the risks involved. Standard home insurance is not appropriate for a HMO property and will not cover your added risks.

What add-ons are available for this insurance?

Many add-ons could be relevant to your needs. Some of the popular options are loss of rent cover, alternative accommodation cover, rent guarantee insurance, and protection against legal costs.

Do I need contents insurance for HMO?

Not legally. However, it may be a good idea to take out cover for your own furniture and other high-value items rented with your HMO property. Items in high-traffic areas, like the kitchen, hallway, lounges, and bathroom, are more prone to damage.

What is rent guarantee insurance, and should I add it to my HMO cover?

Rent guarantee insurance is an optional add-on that protects you when your tenants default. It pays the missing rent up to a fixed amount for a certain time period. Legal expenses are also typically covered for costs associated with evictions, serving notices, and recovering arrears. Limits may differ from insurer to insurer.

How can I find the best HMO landlord insurance?

We always recommend comparing as many quotes as you can. This increases your odds of finding a deal that suits your needs best. A Quotezone, you can fill in one simple form, and be contacted by a specialist provider who can quote for your needs. It’s a quick and easy way to find insurance.

Is HMO insurance a legal requirement?

No, it’s not. However, if you have a mortgage on your HMO house, you’ll probably be required by your lender to have it.

What happens if I don’t have the right insurance?

Without the right insurance for your HMO property, you run the risk of being exposed to serious legal, financial, and contractual risks. If you’re unsure, you can use our platform to source suitable insurers or ask your current insurance provider to help you find the perfect fit for your needs.

Do I need HMO cover for my Airbnb property?

No, not necessarily. To be classed as an HMO property, an Airbnb needs to be rented to two or more unrelated tenants who also share facilities. The tenants must consider the property to be their main residence. For short-term stays, it’s best to have specialised Airbnb insurance, which is more focused on the risks of frequent guest turnover. If unsure, ask your local council for advice on what they class as an HMO requiring a licence.

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