HMO Landlord Insurance

What is an HMO?

 In England and Wales, a house of multiple occupancy is classed as a property rented out by at least three people who are not from the same household (i.e. a family). This involves tenants sharing facilities like the toilet, bathroom and kitchen.

HMO laws were updated in October 2018 to include single-storey flats and two-storey maisonettes under the mandatory licence.

That means all HMOs with 5 or more occupiers living in 2 or more households, regardless of the number of storeys, will need to be licensed. Even if your property is smaller and rented to fewer people, you may still need a licence depending on the area.

To find out more about HMO licences, speak to your local council. Alternatively, Gov.uk have a postcode tool that can show you any HMO restrictions and requirements in your local area.

What does HMO insurance include?

Like standard landlord policies, you can combine different elements of cover to create an HMO insurance policy that is tailored to your business.

Buildings Insurance

We can cover the financial cost of repairing an HMO property’s structural damage. Your policy may protect you against multiple risks, including but not limited to fire and storm damage, escape of water, and environmental damage. Accidental and malicious damage caused by tenants can also be bolted onto your policy at an added cost.

Contents Insurance

Protect the cost of communal areas with contents insurance. We cover furnishings in hallways, receptions and shared living spaces against theft or accidental damage.

Public Liability Insurance

If there is a claim for an alleged injury from a third party at your property, this cover pays for legal fees and compensation.

Additional covers could include:

• Loss of rent insurance
• Alternative accommodation
• Legal expenses
• Landlord home emergency
• Accidental damage
• Malicious damage
• Employer liability

How much does HMO insurance cost? 

Unfortunately, there’s no such thing as an average quote when it comes to HMO insurance. The cost of each policy will vary depending on several factors that include:

• Where your HMO is located.
• The size of your HMO property.
• The type of property you’re renting out.
• The number of tenants you have.
• The number of households.

 There will also be other factors that insurance companies will consider before quoting you a price, such as the type of tenants you rent to. You will be pleased to know that we can cover a range of tenants, including DSS, students, asylum seekers and professionals.

Can I convert a property into an HMO? 

If you want to convert a property into an HMO, you will need to make sure that it passes a Housing Health and Safety risk assessment.

Changes made to the law in October 2018 mean HMO landlords now need to adhere to strict minimum room sizes (e.g. for two persons over 10 years of age, the room must be not less than 10.22 sqm).

It will be up to you to offer enough space for tenants, provide the right facilities, and make sure the property is safe.

Other factors you need to consider include:

• Fire doors
• Emergency lighting
• Smoke/heat detectors
• Minimum number of bathrooms and sinks
• Any Article 4 restrictions
• Gas safety
• Electrical safety
• Rubbish disposal facilities
• Adequate cooking, cleaning and washing facilities

You should speak to your local council about applying for an HMO licence, as the rules can differ depending on where you’re based. If you risk housing tenants without doing so, you could face a penalty fine of up to £20,000 plus costs.

Can I cover non-HMO properties on the same policy?

With Gallagher, you can cover both residential and commercial property on one policy. This makes it easy, and potentially cheaper, to add buy-to-let, HMO and shops in your name.

It’s also easy to add or remove properties from your policy. Simply call us to arrange this.