If you are a landlord, you presumably want to take the best possible care of your property. (You should also note that if you have a mortgage on your property, then typically it will be a condition of your mortgage agreement that you have adequate buildings insurance in place at all times).
When looking for the landlord insurance, it may involve you searching for what you consider is the cheapest landlord property insurance. Understandable as it may be to conduct a search for low-cost landlord insurance, it’s worth remembering that the concept of ‘cheap’ may mean different things to different people.
To some, it may mean the lowest possible cost cover, irrespective of the benefits provided. To others, it may mean a landlord insurance policy that provides the maximum cover at a price that they consider is reasonable.
It is, of course, a matter of personal opinion and preference but thinking initially about how close the landlord insurance policy’s cover is to your requirements may be a wiser approach than concentrating on price alone.
Let’s take a closer look at what landlord insurance covers and then share some tips on getting the most cost-effective and suitable landlord insurance cover for you.
What does let property insurance cover?
Landlord’s insurance typically covers you for things such as buildings insurance, contents insurance (if required) and property owner’s liability insurance.
You may also have the option to enhance the level of landlord insurance cover provided by opting for additional elements of protection such as loss of rent cover and accidental damage insurance cover etc.
It is important to note that if your property stands unoccupied for more than 30-45 consecutive days, you may require additional protection in the form of unoccupied property insurance to ensure your property is fully protected. (Please read our Guide to unoccupied property here as well as watch our short video at the foot of this page).
Let’s further break down the two main components:
Landlord buildings insurance
This cover typically provides protection for the fabric of your property against events such as:
- fire or smoke damage;
- flooding or storms;
- there are also some policies which cover subsidence as standard (such as ours).
In the worst case, landlords building insurance may need to cover the complete rebuild of your property, including costs associated with clearing the land if your property has been razed to the ground.
Landlords buildings cover and property owners’ liability insurance
This provides financial support in the event that someone sues you for damages as a result of injuries they may have sustained while on your property. You may find that with some low-cost home insurance for landlords they may have an unrealistically low payout limit, which could leave you personally liable for any shortfall. Looking for insurance policies with at least £2m worth of coverage may make sense.
Contents insurance for buy to let landlords
This is an optional component of landlords property insurance and if you let your property out unfurnished then you may not need it at all.
If your property is a furnished rental, or you have communal areas, then landlords contents cover may be worth considering and it is typically available in two forms:
- new for old cover, where provision is made for a brand new replacement of your item;
- market value replacement, where you receive compensation equivalent to the second-hand value of your item.
The level of insurance most appropriate for you will depend on how you value your contents and how you view the prospect of having to replace them out of your own pocket if the need arose.
Some insurance for landlords may provide only market value replacement, which may not be what you are looking for if your rental is furnished to a high standard.
You cannot use home insurance instead
Owner-occupier home buildings and contents insurance policies are typically not suitable for property being used for the purposes of rental income. Even if only part of your property is being rented out, any existing owner-occupier home insurance cover you have may immediately become invalid.
Although buy to let insurance is typically a little more expensive than owner-occupier home insurance cover (the cost for the former typically reflects the higher risk of loss and damage), attempting to economise may prove pointless. Insurance companies have ways of establishing the occupancy status of your property at the time the incident took place that lead to your claim.
Attempting to make a claim against an owner-occupier home insurance policy for a property you know to have been rented out, may involve making a false declaration – something that may be an offence and which may make it difficult for you to obtain insurance in future.
As we mentioned above, if you have a mortgage on your property, your loan provider will stipulate that you need adequate landlords buildings insurance. If you use home insurance for a property that you rent out, this could see you breach the terms of your mortgage agreement – as you are not using the correct type of buildings insurance.
Finding the most appropriate landlords’ insurance policy
Here are a few tips that you may find helpful:
1. you will need to make an effort. Although the marketplace for this type of policy is vibrant and highly competitive and thereby potentially good for you, you won’t be able to take advantage of that unless you look at a number of different options rather than simply renewing your existing annual policy out of habit;
2. you may wish to consider selecting a higher level of voluntary excess on your policy and potentially enjoy a discount on your landlord insurance premium;
3. improving your property’s security might also be an option. Some policies may welcome the fitting of things such as extra locks and/or regularly serviced intruder alarms (i.e. security measures above and beyond what is stipulated within your landlord insurance policy documentation), and offer discounts in return;
4. if you are letting your property on a totally unfurnished basis, you may wish to question whether or not you need to be paying for contents insurance. You may be able to obtain, in some cases, a more financially interesting deal if you are only paying for buildings insurance and third party liability cover;
5. try to think in terms of cost-effectiveness rather than getting just the cheapest landlord insurance available. It can be very difficult to compare two policies based on their ticket price unless you have an understanding of the cover provided by the landlord insurance policies concerned. An illustration of this might be given by subsidence insurance, something that might be provided as standard by some policies but not by others.
We understand that as a busy landlord, you don’t want to spend substantial amounts of time thinking about your insurance cover.
Yet treating this subject too lightly might cause you to miss some opportunities for potentially improving your cover whilst at the same time reducing your costs. So, thinking about some of the above points and others like them might be in your best interests.
Of course, at Cover4LetProperty, we will always be only too pleased to offer you help in understanding how you might look for lower-cost cover. You can easily and quickly get a landlord insurance quotation online or over the ‘phone from a number of specialist providers – so you can pick the cover that must suits your needs and at a cost that is realistic to you.
Do you have any questions or need help?
Please call our friendly team on 01702 606 301. We’d love to help!