Saving money on your landlord insurance

Posted: 9th Mar 2016

Estate Agent On Phone In OfficeAt the beginning of April, a new stamp duty land tax will add a further 3% on top of existing stamp duties for anyone buying fewer than 15 buy to let properties in the same transaction.

As the website LandlordZone noted on the 2nd of March 2016, this comes hot on the heels of other measures announced by the Chancellor of the Exchequer during the summer to phase in drastic reductions in the tax relief previously enjoyed by landlords on mortgage interest payments.

Quite apart from the political ramifications of the government’s apparent desire to make life tougher for the private sector landlords who currently make available some 22% of the country’s housing stock, the clamp down makes it more important than ever for any landlord to try to save money on the costs of operating their businesses.

Since one of the major overhead costs for any owner of buy to let property is likely to be landlord insurance, it might be helpful to review some of the ways you might save money on it:

Specialist providers

  • although it occupies just one niche in the wider property insurance market, landlord insurance still takes a number of different forms and levels of cover;
  • some policies may include certain elements of cover, for example, whilst with others you may need to pay extra for that added protection;
  • defining your exact needs and requirements may prove difficult enough, but finding those products which are likely to meet those needs for competitively priced premiums may be little short of overwhelming;

Valuations

  • whenever you are arranging insurance, it is important to have valued those physical items you want to safeguard – in the case of landlord insurance, this is likely to be the building which houses your let property and those contents which you own;
  • the total building sum insured needs to anticipate a worst case scenario in which the property is totally destroyed, the land cleared and must be rebuilt;
  • if you are letting your accommodation unfurnished, note some landlord insurance policies offer free contents cover for very basic protection that might be sufficient for items such as carpets and curtains;

Show you mean business

  • security of your property is important, of course, since it reduces the risk of burglaries and other intruders and the more you invest in security measure the better your chances of enjoying reduced premiums;
  • consider installing intruder alarms, therefore, and investing in the best quality locks for all doors and windows;

Excesses

  • depending on the type of claim you wish to make under your landlord insurance policy, there is typically an excess to pay – this represents the first part of any claim and you remain financially responsible for the payment;
  • it is effectively an uninsured risk and you might choose to increase the size of that risk by accepting a further voluntary excess in return for a reduction in the price of your premiums – since the insurer is then shouldering less of the risks;

Tailor the package to suit your needs

  • as you might already be aware, discounts are typically available if you combine both building and contents insurance;
  • but as a landlord, there is no need to stop there – further discounts may be available by combining all the elements of cover likely to be needed by the owner of buy to let property;
  • additional elements of important cover might include public liability insurance, legal expenses cover, and compensation for any loss of rental income in the event of an insured incident leaving the let property temporarily uninhabitable.

Given the financial pressure under which any buy to let business may be operating in the UK these days, savings on overhead costs are always likely to be welcome. Fortunately, just such savings may be made in the cost of your landlord insurance premiums.