In response to the Renters’ Rights Bill (RRB), landlord insurance providers are making comprehensive changes to their policies. The Bill is the biggest overhaul of the rental market in a generation and has generated a lot of headlines about the damage it could do to both landlords and the rental market.
The insurance industry’s adaptations should help cushion much of its impact and considerably de-risk the market for landlords.
Section 21 abolition: Enhanced legal protection
The ending of Section 21 “no-fault” evictions will require landlords to use more complex Section 8 procedures, which have specific grounds for possession and will extend timelines and push up legal costs.
Insurers are responding by substantially increasing legal expenses coverage limits while developing comprehensive case management services for Section 8 procedures. Many enhanced policies will also now include dedicated legal helplines staffed by rental law specialists and extended rent guarantee periods to account for the longer eviction timelines.
Total Landlord, for example, has increased legal expenses coverage to £100,000, while Goodlord provides appointed solicitors to manage the entire process, and HomeLet covers up to 12 months of rental income until vacant possession is achieved.
Disputes over rent increases: Cash flow protection
New Section 13 protections enable tenants to challenge rent increases through tribunals. During the dispute period, landlords’ cash flow can be interrupted.
To offset this risk, the insurance industry is developing coverage that protects rental income during tribunal proceedings, ensuring landlords aren’t financially penalised while awaiting decisions. Policies will also incorporate backdated protection when tribunals rule in a landlord’s favour.
Pet rights expansion: Strengthened property protection
RRB means landlords will have to consider tenants’ requests to keep pets and can only turn them down for specified reasons. This is likely to leave properties exposed to uninsured damage, especially as the government has removed the mandatory pet insurance clause for tenants.
To mitigate this risk, insurers are significantly increasing damage coverage limits and developing specialised pet-related protection. This includes streamlining damage assessment procedures and expanding inventory protection.
First month payment risks: Immediate coverage
Enhanced tenant protections could lead to the scenario where tenants will deliberately move in and then refuse to make any further payments, knowing that eviction procedures have become more lengthy and complex.
The industry is responding by introducing immediate payment default coverage that activates from the first missed payment.
Goodlord, for example, includes guaranteed first month’s rent coverage when tenants fail to make initial payments, while Alan Boswell Group covers immediate payment defaults up to £2,500 monthly.
Compliance and enforcement: Regulatory defence
The bill will introduce fines up to £7,000 for initial breaches and £40,000 for repeat offences, alongside new discrimination protections and a ban on rental auctions.
As a result, insurers are expanding legal expenses to include regulatory defence coverage and compliance support services. They are also developing integrated monitoring tools and providing specialist legal advice on evolving requirements.
Extended procedures: Comprehensive cost coverage
Longer possession procedures may require landlords to provide alternative accommodation or manage tenant belongings for extended periods.
Insurers are addressing the issue by substantially increasing coverage for accommodation costs and storage expenses, recognising that Section 8 procedures require longer periods of tenant accommodation and property storage.
Goodlord has tripled alternative accommodation coverage to £175 per night for three months and covers storage costs up to £15 daily. HomeLet offers up to £150 per day for hotel expenses plus storage coverage.
Being prepared
With such significant changes in the pipeline, landlords should review their current insurance arrangements to ensure the key legislative changes are covered. The checklist should include – legal expenses limits for Section 8 procedures, rent guarantee periods, property damage coverage levels, and any new protections for regulatory compliance and rent dispute scenarios.
