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Getting the correct landlords insurance for your HMO or bedsit

Block of flats
27 October 2016

By UKinsuranceNET In Landlord Advice

If you are starting out as a landlord, then you’ll be aware of the need for appropriate landlord insurance in order to protect you, your property and even your tenants should something go wrong.

The definition of being a landlord, however, isn’t just a case of you being someone who lets out a room in your home or a whole property. Depending on the type of property and arrangement with the tenant you have, you could be an HMO (house in multiple occupation) landlord or a PRS (private rental sector) landlord, for example.

Getting the bedsit or HMO insurance you need as a landlord is very important – get the wrong type, and you could leave yourself financially vulnerable if the unexpected happens.

First, let’s look at the difference between a bedsit and an HMO.

What is a bedsit?

Typically, a bedsit (also known as a bed-sitting room) is a single unit within a property where someone is renting a room but they are sharing other facilities with other people in the household such as the bathroom and lavatory.

An example could be where you rent out a room to someone who has their own bedroom and maybe a small, informal kitchen (with an electric ring and kettle), but who shares the bathroom and lavatory.

What is an HMO?

HMO stands for house in multiple occupation. An HMO is typically defined as a whole residential building which contains different rooms or units occupied by different, unrelated tenants. The landlord does not live here.

A house in multiple occupation is rented out by at least three people who are not from one household but they share facilities such as the bathroom and kitchen.

Also known as house shares, a typical example of an HMO may be a student let, where several students each have their own room/s but share perhaps a kitchen.

What is the difference between an HMO and a bedsit?

To put it into layman’s terms, an HMO has at least three people living in the building each from different households and who share facilities such as the kitchen and bathroom.

A bedsit is typically a self-contained unit (e.g. it may have a single electric ring or kettle) within a building.

One local district council puts the differences quite succinctly here.

Won’t bedsit or landlord insurance cover my HMO and vice versa?                  

No. While landlord’s insurance policies offer the elements of protection required for a singular buy to let property let to a single person, couple or family, additional cover is typically required for an HMO.

This is because the very nature of an HMO is that there are separate households all in one building, meaning lots more footfall compared to one person living in a bedsit or one family living in a home.

More footfall equals more hazards / risks – whether from the communal areas getting damaged or the increased likelihood of fire or theft etc.

We hope this short blog explains the difference between HMO’s and bedsits. As you can see, with these differences not only comes the need for specific landlords insurance, but also you’ll have different obligations too (for large HMO’s for example, you need a licence and so on).

Don’t make the mistake of getting the incorrect type of landlords insurance for your property and tenant type. In the event of a claim, you could find it is rejected.

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