Author
Bowtie Team
Updated on
2025-07-10
Disclaimer: This article is translated with the assistance of AI.
In Hong Kong, investing in property is a popular choice, often seen as a safer bet compared to other options. But being a landlord comes with risks—unexpected accidents or problematic tenants can hit your income hard! Luckily, there’s a solution called “Landlord Insurance” that safeguards your rental income and household belongings.
Hong Kongers Love Investing in Property
Earlier, Citibank released the “Hong Kong Millionaire Survey Report 2020,” revealing that over 500,000 people in Hong Kong have net assets of HK$10 million or more, making them bona fide millionaires. A whopping 71% of their net worth is tied up in property. Hong Kongers have always had a soft spot for investing in “bricks and mortar.” With ultra-low interest rates over the past decade pushing property prices skyward, more folks are jumping into the real estate market, opting to buy property and become landlords for rental income.
Risks of Buying Property for Rental Income
Buying property to rent out can potentially increase your asset value, and in the current low-interest environment, it might even bring positive cash flow to landlords. However, unexpected events can turn things sour—like dealing with rogue tenants who delay rent payments and trash the place, or accidents causing property damage that cuts into rental income. Worse still, if an accident in the building’s common areas leads to legal liabilities, landlords could be in for a real headache.
Unexpected Accidents
Johnny, an auditor, often works late into the night. For convenience, he rented an old apartment near his office in Quarry Bay. But disaster struck when a fire broke out at a restaurant on the ground floor, spreading to Johnny’s unit. Thankfully, no lives were lost, but his apartment was severely smoke-damaged and uninhabitable for the time being. After the incident, Johnny moved back in with his family temporarily until repairs were done. Due to this mishap, the landlord lost three months of rental income.
Beyond cases like Johnny’s, renting out property can come with other surprises. For instance, a window frame falling from your unit and injuring a passerby could lead to legal liabilities for bodily harm or property damage due to negligence. The resulting legal fees and compensation can be hefty.
Dealing with Rogue Tenants
The goal of renting out property is steady income, but if you’re unlucky enough to encounter a rogue tenant, losing rent might be the least of your worries. You could end up shelling out extra cash for repairs to your property, or even resorting to legal action to recover unpaid rent or reclaim your space.
Can Landlord Insurance Cover These Risks?
Some insurance companies in the market offer landlord insurance plans specifically designed to protect rental income. These plans typically cover rental protection (including legal fees for recovering unpaid rent or repossessing the property) and legal liabilities for incidents in the unit or common areas. Best of all, the premiums are often quite affordable, giving landlords peace of mind while collecting rent.
Certain insurers also provide coverage for accidental damage to household contents, including the landlord’s furniture, appliances, and belongings. Some plans even compensate for rental income loss if the property becomes uninhabitable due to an accident.
Take Johnny’s case as an example. If his landlord had purchased such insurance, they could have claimed compensation for the three months of lost rent. Some policies go further, offering 24-hour emergency home support services, such as referrals for plumbers, electricians, appliance repairs, or even temporary childcare arrangements. This means landlords and tenants don’t have to stress over everyday home maintenance issues.
Landlord Insurance: Premiums and Coverage Details
Below is an example of a landlord insurance plan for reference. For a unit with a usable area between 561 sq ft and 800 sq ft, the standard coverage premium is just HK$900 per year.
| Coverage Scope | Maximum Coverage (HKD) |
| Section 1 – Legal Liability | |
| Landlord’s Legal Liability and Responsibility for Common Areas | Annual Coverage: 10,000,000 |
| Section 2 – Household Contents | |
| Total Coverage Amount | Annual Coverage: 250,000 |
| A) Basic Coverage | |
| • Household Contents | Per Set: 100,000 |
| B) Rental Loss Protection | |
| a) When the home becomes uninhabitable due to a covered incident, or | Monthly: 20,000 |
| b) When the tenant fails to pay rent as per the terms and conditions of the “Lease Agreement,” provided the landlord has already | Maximum Compensation Period: 6 Months |
| (i) taken legal action against the tenant; and | |
| (ii) obtained a court ruling on the overdue rent; and | |
| (iii) failed to recover the overdue rent within one month after the court ruling. | |
| Section 3 – Emergency Assistance Services | |
| 24-Hour Emergency Home Support Services | |
| • Electrical Repairs, Plumbers, Locksmiths | Cashless Arrangement |
Table 1: Basic Coverage of Landlord Insurance
Of course, everyone’s situation is unique, and coverage varies across insurance providers. Readers should carefully review the coverage scope and terms of different insurance products and choose a plan that best suits their needs.
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