How can I get cheap landlord insurance?

Posted: 29th May 2019

Are you looking for cheap landlord insurance? As a landlord, you are no doubt aware of every expense that you have to meet as a property owner. So, in order to maximise your return on the property you may be looking for the cheapest policy that you can get.

But before we look at cheap landlord cover, let’s discuss why you may actually need landlord insurance.

Why do I need landlord insurance?

Being a responsible landlord typically involves thinking about landlord insurance (also known as let property insurance or buy to let insurance).

This is to protect two different sets of interests – yours (perhaps including those of your mortgage lender) and any tenants you may have.

Your interests

As a landlord, you probably have a great deal of capital tied up in your property.

Having the appropriate type of landlord insurance may make sense, unless you enjoy the prospect of putting that capital at risk.

There are three main components to think about when considering let property insurance:

  • the building itself plus the fixtures and fittings;
  • the contents – particularly important if your property is rented out furnished;
  • third-party public liability insurance – to protect you should your tenants, their guests or a passer-by, be injured (or their property damaged) as a result of your property.

This cover is quite distinct from similar cover that may be provided by an owner-occupier home buildings and contents insurance policy and you cannot, therefore, use owner-occupier policies for a property that you’re renting out. We will discuss this in more detail later.

Rented-out properties have a different risk profile and landlord insurance is designed to cover that.

Now you understand what landlord insurance is, what do you need to know about cheap cover?

What does “cheap” mean?

This is not a trick question. The concept of something being “cheap” has different meanings to different people. For some, cheap landlord insurance is just a basic policy without the frills. For others, “cheap” landlord insurance policies may be ones to be avoided because they are not perceived to offer the most suitable cover.

In a nutshell, what you think is cheap landlord insurance may be completely different to what your neighbour or a contemporary considers is cheap. And what you define as a bargain insurance policy may not be the same for someone else. That said, there are landlord insurance policies available that offer comprehensive cover at an affordable cost.

It’s hard but it’s worth trying to focus on suitability rather than cheap when you’re thinking about landlords’ insurance.

There’s perhaps not much point in having exceptionally cheap let property insurance for landlords in terms of absolute cost if it also doesn’t provide you with the cover you need.

This means that when you are looking for let property insurance, perhaps the real issue you may need to consider is whether you are getting the cover you need at a price you find acceptable.

What does “cover” mean?

This is not a trick question either. The cover available from different providers may vary. Basically, if your let property is damaged by an insured risk, in the event of a successful claim, you can expect your insurer to pay for the repairs that are necessary (after you have paid the excess, which is the first part of a successful claim) – up to pre-agreed limits.

A typical list of insured perils may include:

  • storm;
  • explosion;
  • damage caused from objects falling from aircrafts;
  • flood (depending on where the property is located); and

Some insurers may offer a more extensive list of insured risks, and this is an issue that you may wish to check out in detail when you are comparing let property insurance quotes. For instance, some providers – such as ourselves – may offer malicious damage and cover for subsidence as standard, while others may not offer cover for these at all.

Are there any discounts available?

If you are looking for cheap landlord insurance then price is obviously important. So, you may wish to consider whether any discounts may be available. There may be discounts if you are insuring a portfolio of properties, as insurers may want to attract as much business as possible from you.

But with some providers there may also be a discount available if you install extra safety features (on top of those that your policy may oblige you to fit) to prevent theft and deter malicious activities.

In terms of the excess (this is the first amount of any successful claim that you are liable to pay), opting to pay a voluntary excess on top of the mandatory amount may also reduce the cost of your cover.

So, if you are looking for cheap landlord insurance, do bear all the above pointers in mind. That way you should be able to get suitable let property insurance at a price that suits your budget.

We’re all vulnerable to suggestions of a bargain and someone talking about cheap home insurance for landlords is likely to catch our ear.

Home insurance is cheaper than landlord insurance – can I use that instead?

Let’s think for a moment about the difference between home and your rented property.

If you have a home that is a separate dwelling entirely and exclusively lived in by you and your family, then you’ll typically need owner-occupier home buildings and contents insurance.

However, if your property is rented out then you’ll require buy to let insurance.

Sometimes complexities arise where landlords reside in the same property as their tenants. As a general rule, the property will require landlords’ insurance and you can’t simply extend any existing owner-occupier cover you have.

Holiday homes

Another area that sometimes misleads is that of holiday rentals.

Even if you only let you home out for a week or so here and there for holiday purposes, you are still a landlord and your home is being used for commercial purposes.

Once again, holiday home insurance would typically be required to protect your interests.

If you let out all or part of a property – whether for holiday home usage or as a long-term let, it is imperative you have the most appropriate, suitable property insurance. Failure to do so – for example, you have a home insurance policy to cover a property that is let – means that in the event of a claim, it could be rejected.

Not only that, but if your property is mortgaged, it is typically a condition of your mortgage agreement that you have appropriate buildings insurance at all times – if you have the incorrect type (as cited in our example above) then in theory, you are breaking the terms of your mortgage contract. This means your mortgage provider could ask that you pay the outstanding balance of your mortgage in one go.

Unoccupied properties

As a landlord, you may have to accept that your property is sometimes going to be unoccupied between rentals. Equally, you may have to keep it so for a period if you’re engaging in re-decoration, refurbishment or significant re-development.

This may also be the case shortly after you’ve purchased a buy-to-let basis and are waiting for various works to complete before you start renting it out.

Typically, buy to let insurance regards any property that has stood unoccupied for more than 30-45 consecutive days, to be empty.

In such cases, your existing insurance may become invalid. That is because insurance companies typically regard empty properties to constitute a higher risk than those that are occupied.

That arises from things such as burglars preferring them because there is less risk of interruption. It’s also possible that an initial small problem such as a minor leak in a pipe may become increasingly serious because there is nobody present to notice it.

For all these reasons, insurers typically require that you make special arrangements in such situations and that is called unoccupied property insurance.

You may need specific unoccupied property insurance if you are to stay protected in such circumstances. This may also apply to traditional owner-occupied policies.

Read our Guide to unoccupied property here.

Taking your time

With all these considerations, searching for suitable buy to let insurance may be typically a wiser approach than just looking for cheap home insurance for landlords. It’s an area that may prove critical to you in a crisis so getting it right is important.

If you have any doubt in your mind as to just what sort of cover you need, or you need help getting a landlord insurance quote, then we will always be happy to guide you as to what sort of cover would most suitable for your needs. Simply give us a call or drop us and email! We’d be delighted to help!