HMO Insurance is specialist landlord insurance for house-in-multiple occupation properties. Whereas standard buy-to-let policies will only provide cover for property let under a single Assured shorthold Tenancy (AST) agreement, bespoke HMO cover caters for multiple tenancy agreements for licensed HMO properties.
In England and Wales a house-in-multiple occupation is generally defined as a property rented to at least 3 people who are not from a single household (family), but share facilities such as a kitchen or bathroom.
If your local authority has deemed the property your wish to rent out as an HMO, you will need to acquire the relevant licence and also purchase specialist HMO Insurance cover.
Insync arranges cover for 100’s of landlords renting HMO properties throughout the UK. We understand the licensing process and the unique insurance requirements when letting to multiple tenants.
We have access to 5+ specialist HMO insurers allowing our dedicated property advisors to compare cover and prices to help you find the right cover at the right price.
As with any property policy the core cover under an HMO policy is buildings. However we have the ability to include additional extended cover to meet your specific requirements.
Loss of rent makes provision for lost income following an insured claim, whilst alternative accommodation cover will the cost of rehousing tenants should the property be deemed uninhabitable following a loss.
Other popular extensions are property owners liability and legal expenses. Depending on the location, you may also choose to include terrorism cover.
All policies fully approved for HMO Licensing
Specialist cover from a single property to large property portfolios
Purpose built properties or conversions
Short-term rental cover available
Owner or managing agent controlled properties
Cover available for all tenants including student, DSS and local authority lets
Non-standard construction and properties undergoing rennovation
Loss of rental income and alternative accommodation protection
Legal liabilities as an HMO landlord (Employers and/or Property Owners Liability)
Property Owners Legal Expenses
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A tenant overloads an electric socket in one of the seven bedrooms and whilst out at work a fire ignites and quickly spreads up through the ceiling and across the property causing significant fire and smoke damage.
Total claim costs exceeds £55,000 through renovation costs, loss of rent and alternative accommodation to each of the seven tenants whilst repairs were completed.
Standard buy-to-let insurance companies will either; a: not offer cover for house-in-multiple occupation properties, or b: impose significant premium loadings. However by utilising a specialist HMO insurance provider who understands the intricacies of multiple let property risks you can often find that rating is parable with a single tenancy policy.
Rating will depend on the property location (post-code) and occupation of the tenants. One area of risk which will drive a significant premium increase, is the allowance of cooking in tenants rooms rather than dedicated kitchens.
The purchase price of the property has no direct correlation to the policy sum insured. Your HMO policy should reflect the rebuilding sum insured of the property rather than the value as the purchase price will include the cost of the land. If you are purchasing the property via a mortgage then the lender will normally insist on a professional valuation.
As part of the survey the valuer will indicate the suggested rebuilding sum insured an you will be required to purchase cover to this minimum level.
Even if lender is not involved we would always suggest you engage a suitably qualified firm to undertake a survey to ensure rebuilding cost is adequately assessed. This should also take into account any conversion or improvements undertaken if the property is being converted to HMO status.
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