Buy to let buildings insurance is bought for two audiences at once: the owner, who wants the building replaced if it burns down, and the lender, whose mortgage conditions almost always require the building to be insured on stated terms with their interest noted. The lender's requirements set the floor. Everything above that floor is the owner's own risk decision, and the gap between the two is where most of the useful choices sit.
What the mortgage conditions typically require
Cover for the full reinstatement cost against a listed set of perils, maintained continuously, with the lender's interest noted on the policy so they are told if it lapses. Some lenders require particular perils or a minimum sum insured tied to their own valuation. Letting a buy to let property on an ordinary home policy usually breaches both the insurance contract and the mortgage, so the switch to landlord cover is not optional once the first tenant moves in.
Rebuild cost, not purchase price
The sum insured is what it would cost to demolish and rebuild the property, including professional fees and clearing the site, and for a flat it is usually the freeholder's problem rather than yours. On a house it is the number owners most often get wrong, in both directions: insuring at the purchase price overinsures a cheap house in an expensive area and badly underinsures a period property where rebuilding costs more than buying.
What the lender does not require and you probably want
Loss of rent, so the mortgage is still paid while the property is uninhabitable. Property owners liability, which is the section with the largest possible claim. Accidental damage, which is where tenant damage actually lands. Alternative accommodation if the tenancy obliges you to rehouse. None of these is usually a lender condition and all of them are why a landlord policy costs more than a bare buildings policy.
Leasehold flats, where you may be buying the wrong thing
If the buy to let is a leasehold flat, the freeholder almost certainly insures the building already and recharges you through the service charge. Buying buildings insurance on top is paying twice. What you need instead is landlord contents, property owners liability, loss of rent and often alternative accommodation. Read the lease before buying anything.
Questions people ask about buy to let buildings insurance
Does my mortgage lender have to be told about the insurance?
Yes, in almost every buy to let mortgage. The lender's interest is noted on the policy so that they are informed if it lapses, and continuous cover is a condition of the loan.
Can I insure a buy to let on a normal home policy?
No. Home policies are written for owner occupied property and exclude letting. Doing it usually voids the policy and breaches the mortgage.
What sum insured should I use?
The rebuild cost, from a surveyor's figure or a recognised rebuilding cost calculator, not the purchase price or the market value.
Do I need buildings insurance for a leasehold flat?
Usually not, because the freeholder insures the structure and recharges it. Check the lease, and buy contents, liability and loss of rent instead.