Does Landlord Insurance Cover Alternative Accommodation for Tenants?
Yes, on most landlord policies. The catch is that the money almost always comes out of the same limit as your loss of rent cover rather than sitting on top of it.
When a fire, flood or subsidence claim leaves a rental property unfit to live in, your tenants have to go somewhere. Alternative accommodation cover on a landlord policy pays the reasonable cost of housing them until the work is finished.
Most landlords find out how that limit is shared only when they claim. Here is what it pays, where it stops and who is on the hook when it runs out.
Most landlord policies will rehouse your tenants when a fire, flood or subsidence claim makes the property unfit to live in, but the cost usually comes out of the same limit as your loss of rent rather than sitting on top of it. Read your schedule before you need it, because a long rebuild can exhaust that shared limit while the tenancy is still running. Tell your insurer straight away, agree the standard of accommodation with them rather than booking first, and keep every receipt.
Compare landlord buildings insurance quotes and check the alternative accommodation limit before you need it.
- What does alternative accommodation cover pay for?
- Does it sit inside your loss of rent limit or on top of it?
- Are you legally required to rehouse a tenant after a fire or flood?
- What happens to the tenancy and the rent while the property is uninhabitable?
- When will the cover not respond?
- Which landlords need the most of this cover?
- How should you handle the claim?
- Frequently asked questions (FAQs)
What does alternative accommodation cover pay for?
It pays the reasonable cost of housing your tenants elsewhere while an insured event is put right, usually a serviced flat or a short let. Insurers reimburse the real cost rather than paying a fixed allowance.
Where the cover sits on your policy
It is not usually a separate product. On most wordings it sits inside the buildings section as an extension, alongside loss of rent.
Alan Boswell Group words the benefit as loss of rent or alternative accommodation costs, and that ‘or’ is repeated across most of the market. Our guide to what landlord insurance covers runs through the other sections.
What counts as reasonable
Insurers expect accommodation of a similar standard to the home your tenants lost, not an upgrade. A family in a three-bedroom semi gets a three-bedroom short let.
Your tenants’ own furniture and belongings are never part of this. Those belong on their contents insurance, not your policy.
| Cost | Usually covered? | What to check first |
| Serviced flat or short let for the tenant | Yes | Market rate for a similar size and standard of home |
| Hotel or B&B for the first nights | Yes | Insurers move tenants to cheaper rooms within days |
| Deposit on the temporary let | Usually | Refundable, so insurers advance it rather than treat it as a loss |
| Tenant removal and storage costs | Rarely | Only where the wording names them, so ask before booking a van |
| Tenant’s own furniture and belongings | No | That is the tenant’s contents cover, not yours |
Does it sit inside your loss of rent limit or on top of it?
Inside it, on almost every mainstream landlord wording. Loss of rent and alternative accommodation draw on one shared limit, so every pound spent rehousing a tenant is a pound of rent cover you can no longer claim.
How the shared limit works
Most insurers set the combined limit as a percentage of the buildings sum insured, commonly 20% to 30%. A few use a flat cash cap instead, and Homeprotect quotes £30,000 on its landlord product.
Take a £250,000 rebuild sum with a 20% combined limit. That is £50,000 to cover both the rent you lose and the cost of housing the tenant, and loss of rent cover is only half the demand on it.
| Draw on a £50,000 combined limit | 6 months of repairs | 12 months | 24 months |
| Loss of rent at £1,200 a month | £7,200 | £14,400 | £28,800 |
| Rehousing the tenant at £1,800 a month | £10,800 | £21,600 | £43,200 |
| Combined draw on the one limit | £18,000 | £36,000 | £72,000 |
| Left from the £50,000 limit | £32,000 | £14,000 | Exhausted at month 17 |
Why the indemnity period matters more than the cash limit
The indemnity period caps how long the insurer keeps paying, usually 12 or 24 months from the date of the damage. Serious fire and subsidence jobs routinely run past 12 months.
Ask for 24 months on a listed, non-standard or flood-area property. The extra premium is small next to the clock stopping mid-repair.
Are you legally required to rehouse a tenant after a fire or flood?
No. There is no statutory duty on a private landlord in England or Wales to provide alternative accommodation, and your housing law obligations stop at repairing the property.
What your repairing duty covers
Section 11 of the Landlord and Tenant Act 1985 makes you responsible for the structure, exterior and the installations for water, gas, electricity, heating and sanitation. It says nothing about housing anyone while you carry out the work.
The Homes (Fitness for Human Habitation) Act 2018 goes further and implies a covenant that the property is fit to live in throughout the tenancy. A tenant can sue for damages and an order to repair, but not for a hotel room.
What the council must do under part 7 of the housing act 1996
Rehousing is a local authority function, not a landlord one. Part 7 of the Housing Act 1996 requires the council to make inquiries under section 184 once someone applies as homeless.
Section 188 creates an interim duty to secure accommodation where the council has reason to believe the applicant may be homeless, eligible and in priority need. Section 189B adds a relief duty lasting 56 days.
Priority need is the gate most single working tenants fail. Families with children and vulnerable adults get a roof; a working couple usually get advice and agent listings.
When your tenancy agreement changes the answer
Corporate and relocation lets sometimes carry an express rehousing clause. If yours does, that is a contractual promise and your insurer will want to see it.
What happens to the tenancy and the rent while the property is uninhabitable?
The tenancy carries on. A fire does not end it automatically, and unless your agreement contains a rent suspension clause the rent stays legally due even though nobody can live there.
Rent suspension clauses and who pays
In practice no sensible landlord chases rent on a burnt-out house. That is the gap loss of rent cover fills, paying you what the insurer accepts you would have had.
Do not confuse this with rent guarantee insurance, which responds to a tenant who will not pay rather than a property that cannot be lived in.
Why the renters’ rights act turned this into a retention decision
Since 1 May 2026 every assured tenancy is periodic and fixed terms are gone, as the government’s guide to the Renters’ Rights Act sets out. Your tenant can serve two months’ notice to quit at any point, including the week after the fire.
If you do not rehouse them, most tenants find their own place and end the tenancy. You then finish the repairs with a fresh void to fill.
Rehousing is how you keep the tenancy alive through the works, which is a commercial argument for the cover rather than a legal one.
When will the cover not respond?
When the property is damaged but still liveable, when the cause is not an insured peril, and when the work was planned rather than forced on you. Those three refusals account for most declined rehousing claims.
What uninhabitable means to an insurer
The test is whether the property is unfit to occupy as a whole, not whether it is unpleasant. A wrecked kitchen with working heating rarely clears the bar.
Insurers want professional confirmation, usually from the loss adjuster, environmental health or the fire service. Your own word for it will not do.
The exclusions that catch landlords out
| Situation | Does the cover respond? | Why |
| Kitchen destroyed by fire, rest of the house usable | Usually no | Most wordings need the whole property unfit |
| Burst pipe floods the ground floor | Yes | An insured peril, and the home is unfit |
| Damp and mould after years of neglect | No | A maintenance failure, not a sudden event |
| Council bars entry after a fire next door | Often yes | Denial of access extensions cover this |
| Rewiring you scheduled yourself | No | Planned works are not an insured event |
| Property empty beyond the unoccupancy limit | Often no | Cover narrows once it has stood empty too long |
The void period trap
Once the tenant leaves, the property is unoccupied and most landlord policies restrict cover after 30 to 45 empty days. Tell your insurer the day it empties and ask about unoccupied property cover for the rest of the works.
Which landlords need the most of this cover?
Anyone letting to multiple households, anyone with a mortgage to service, and anyone whose property sits in a flood or subsidence area. The shared limit runs out fastest where the rehousing bill is largest.
Where the limit runs out fastest
An HMO with five tenants from separate households needs five sets of accommodation, not one. A 20% limit that looks generous on a single let disappears in months.
A buy-to-let mortgage keeps taking payments while the property is a building site, so the rent half of the limit matters as much as the rehousing half.
Short-stay lets are different again, because Airbnb-style cover deals in cancelled bookings, not a displaced household.
How to buy more of it
Ask for the combined limit as a cash figure, then work out what it buys at local short-let rates. You can compare landlord insurance quotes on that basis rather than on headline price.
Leasehold landlords should check the block of flats policy first, since the freeholder’s cover normally carries the rehousing extension for the whole building.
How should you handle the claim?
Call the insurer before you book anything. Costs you commit to without agreement are the ones that get argued about six weeks later.
The first 48 hours
- Notify the insurer immediately; many wordings expect contact within 24 to 48 hours.
- Photograph and video every room before anything is cleared or dried out.
- Get written confirmation the property is unfit from the adjuster or fire officer.
- Keep every receipt for accommodation, and pay by card so the trail is clean.
Out of hours, landlord home emergency cover is what gets a contractor on site the same night to make the property safe.
What to agree before you sign a short let
Agree the weekly rate, the booking length and the deposit in writing. Insurers push back on a six-month lease when the repair schedule says eight weeks.
Check whether the policy excess applies once to the whole claim or separately to each section, and confirm the insurer’s complaints route through the ABI if you cannot get an answer.
Tell your tenant to check their own renters insurance, because some tenant policies pay their temporary living costs too.
Frequently Asked Questions (FAQs)
On most mainstream policies it is built into the buildings section and shares a limit with loss of rent. Budget and stripped-back products sometimes leave it out, so read the schedule.
Insurers normally settle with the accommodation provider or reimburse the landlord who paid. Agree the route before you commit to anything.
Yes, but almost always from one shared limit rather than two. Once that limit is spent, both stop.
Until the property is fit to live in again, capped by the indemnity period. Twelve months is the common default and 24 months is worth asking for.
Most insurers reimburse a reasonable cost agreed in advance. Anything booked without approval is a negotiation, not a right.
Yes. Since 1 May 2026 every assured tenancy is periodic, so a tenant can serve two months’ notice to quit whenever they choose.
Only if the tenant is eligible, homeless and in priority need under Part 7 of the Housing Act 1996. Single working tenants without dependants usually get advice instead of a room.
The block policy normally carries the rehousing extension for the whole building. Ask the managing agent for the schedule.