Around one in four residential landlords in the UK have the wrong or no insurance and that around three quarters of these have bought regular household insurance instead of a commercial policy, leaving themselves vulnerable to having any claims turned down, data from AXA Business Insurance suggests.

AXA believes that a large percentage of those with the wrong insurance are ‘accidental landlords’ – those who did not originally buy with the intention of renting out their property, or who are forced to continue renting out because they cannot sell at present.

Research among a sample of those who had bought the wrong insurance revealed that one in five had been previously living at the address themselves and simply renewed the existing home insurance cover when they moved out, believing it to be adequate.

Meanwhile, 43% were unaware of the existence of landlord cover, 28% thought landlord and residential cover were the same and 11% thought the landlord option was too expensive so bought a residential policy instead.

73% of these landlords have less than £1,000 set aside for emergencies while 18% have nothing saved, leaving them financially exposed should their insurer turn a claim down because the wrong insurance is in place. One in twenty are likely to claim in any given year.

The research also exposed other areas where landlords are leaving themselves and their tenants unprotected:

• only 53% have a tenancy agreement
• 27% have a current inventory
• 54% have a deposit (less than half of which are kept in a protected scheme)

Darrell Sansom, managing director at AXA Business Insurance, said: “While many of these people may well have never intended to become landlords and possibly it is something they would rather not have to think about, the consequences of not sorting out some of the basic admin and putting some core protection in place could make it a much bigger headache for them than it already is.

“As an industry, insurers need to take some responsibility to ensure that the right questions are asked when customers are buying insurance. And consumers need to be made aware of the pitfalls of buying the wrong cover.

“Someone else living in your property can present a very different insurance risk than you living there yourself – insurance products are designed and priced to match these risks so it’s important you get the right one.”