How do you find the most suitable landlord insurance? It might be a simple question, but the answer can sometimes be a little more complicated than it first appears.
Getting the most cost-effective and appropriate landlord insurance cover for your business is key.
Buy a policy that doesn’t offer all the protection your investment needs, and in the event of a claim, you could find yourself suffering severe financial loss. Similarly, buying a low-cost landlord insurance policy because it is cheap, rather than one that gives you the protection required, can be a very costly mistake.
Here we share some tips on looking for landlord business insurance – and you might want to pay particular attention to the first of these.
Typical landlords Insurance
At the risk of stating the obvious, the first point to keep in mind is that what might be best for somebody else might not be best or even necessarily suitable for you. One landlord’s insurance policy may differ significantly from another.
What that means is that a policy that is particularly suited to someone else, may not be the most suitable option for you. It really will be necessary to think closely about what cover is important to you and then compare landlord insurance cover against that being offered by another let property insurance policy. For most intents and purposes, therefore, there is no such thing as typical landlords’ insurance.
That is down to the fact that landlords’ businesses can differ significantly from one to another.
For example, perhaps your business involves:
- a number of let properties within your portfolio;
- a property that is an HMO (House in Multiple Occupation);
- letting out a prestigious detached house;
- a property that is a single flat in a building containing many other residences that you do not own;
- letting out a relatively small part of your home to holidaymakers during the summer season while you continue to occupy the rest; or
- letting a single room in your house to a student.
Although all of the above situations will typically require landlord insurance, there may be subtle differences between policies in the above contexts which would make some a better fit to your circumstances than others.
The first step is, therefore, to thoroughly understand your business and consider the risks it faces. That should be the starting point for trying to find appropriate landlord insurance cover.
The second key point to make is that finding a good match for your particular business position is not always easy.
It’s perfectly possible to quickly become swamped with options and unless you are determined to become an insurance expert as well as a landlord, the risk is that you’ll default to selecting one based on price alone. That is likely to prove unwise.
The fact is that you can tell almost nothing about the suitability (or otherwise) of landlord insurance for your particular situation by looking solely at the advertised price.
To illustrate why the price can be deceptive, consider just two examples:
- what level of excess does the policy carry? That is the sum of money you will be expected to contribute towards the cost of any future successful claim. A seemingly very low-cost policy might carry a large excess and that may prove to be something you’ll regret if you need to make a claim in future;
- all insurance policies carry terms, conditions and therefore exclusions. However, some exclusions might be rather more “stringent” than others and that might be something that could explain why the policy’s price is seemingly so low.
It’s therefore always advisable to seek advice and guidance from an expert when trying to find landlord insurance.
Why use a landlord insurance broker to find the most suitable policy?
An independent landlord insurance broker may help you to avoid some of these pitfalls. Trawling through quote after quote of landlord insurance policies is hardly anyone’s idea of fun – it is time-consuming, and you might still miss precisely the policy that suits you.
You can avoid the hassle altogether, of course, by consulting us here at Cover4LetProperty and letting us do all the hard work on your behalf. Simply complete our online form or ask one of our friendly and experienced staff to give you a call (or please call us on 01702 606 301) and they can help find you the most appropriate and cost-effective landlord insurance.
We are not an insurance company but an insurance broker, meaning we can trawl through a number of different policy options quickly and easily to find the one that is both appropriate and cost-effective for you.
Here is a quick summary that might help clarify the difference between direct insurers and insurance brokers:
- insurance providers, sometimes called insurance companies, typically write policies and deal with any future claims that might arise against them;
- they are understandably keen to sell their products to the purchasing public;
- there is nothing wrong with purchasing cover directly from an insurance company providing that you can be sure that you are getting good, suitable cover and at a cost-effective price;
- the problem is, it might be exceedingly difficult to establish that unless you go to a significant number of insurance companies and obtain quotes from each of them. Once you have done so, you then need to sit down and painstakingly compare those multiple quotes against each other in several different dimensions and not just that of price;
- an insurance broker typically has contact with many different insurance providers and knows their portfolios well. Once they see your exact requirements and situation, they may be able to quickly match these against a selection of policies that they know will be suitable and cost-effective;
- this might save you substantial amounts of time, a lot of frustration and also perhaps reveal options and tariffs that you might not have seen yourself;
- the reason that they may have access to special tariffs is simply that some insurance companies produce products that are specifically designed to be offered exclusively through brokers; and
- by choosing a specialist in landlords insurance, you may also take confidence in their understanding not only insurance policies but also much of the specific nature of the landlord business – they will not be looking for typical landlord insurance but landlord insurance that is suitable for you and your own unique, particular needs and circumstances.
In so far as landlord insurance policies themselves, there are several more detailed considerations which you might want to bear in mind:
- loss of rental income – if your property is not rentable due to an insured event, some policies may compensate you for a loss of rental income up to a specified level;
- subsidence – unlike the position in previous decades, this cover is now no longer universally found as standard in all policies;
- malicious damage – if you are unfortunate enough to have tenants that deliberately damage your property, some policies may cover this;
- not all let property insurance providers will necessarily provide cover irrespective of the type of tenant in your property – some policies may specifically exclude students or DSS housing benefit recipients, for instance;
- you may find that trace and access cover is not necessarily commonplace on landlord’s insurance policies – but it is a type of cover that may be extremely useful if a tradesperson has to start demolishing areas of your house in order to find a fault;
- think about the level of customer service offered by your insurance broker – after all, there is little point in going for landlords cover if the people on the other end of the phone may hinder rather than help your claim;
- a related question, if you want to buy landlords insurance online – does the website you are using have a telephone number where you can contact someone if you have a query or need help? Or do they hide behind just an email address with no other way to contact them;
- compare the risks that are covered. Insurers may typically offer a “menu” of what perils are included in the cover and these may vary slightly among the different providers. For example, we offer malicious damage cover as standard where some other providers do not;
- how much is the sum insured for landlord’s liability insurance;
- do you require buildings insurance cover only or buildings insurance and contents cover; and
- what are the optional extras, and do you need them? For example, you may require landlord contents insurance or accidental damage business insurance.
Are you getting value for money?
Different policies offer different features and benefits, so when comparing your existing cover with other policies, you need to compare more than just the price.
For example, here at Cover4LetProperty, all our policies offer, as standard:
- subsidence cover;
- malicious damage caused by a tenant; plus
- other features that some other companies may charge for.
So, when you do look at costs, also review the elements of cover you are getting too, so you can compare landlord policies on a like-for-like basis. That way you can feel you are getting the most appropriate protection at the most competitive price.
Look at the policy exclusions
Check out the policy for exclusions and limitations – to what extent are these likely to limit the suitability of the policy for your specific needs and circumstances?
An important exclusion to be aware of is the importance of your property becoming unoccupied. By “unoccupied”, insurers may typically mean that no one has lived in the property for 30-45 consecutive days. To an insurer, an unoccupied property is a risky property (at greater risk of vandalism, fire, and other perils).
So, an insurer may void the landlord’s insurance policy if your property is empty for this long and you would need to ensure you have the appropriate standalone cover as an alternative – unoccupied property insurance. (Read: Our guide to unoccupied property here).
Don’t automatically renew your let property insurance cover without checking your cover requirements
If renewal time has come around again, or you simply wish to review your current landlord’s insurance policy to make sure you have the most cost-effective cover, then check whether your circumstances have changed since you purchased your last policy:
- has your tenant type changed (not all insurance providers will cover students or asylum seekers, for example);
- have you carried out extensive renovations which means you need to adjust your building sum insured;
- it may be your insurance covers both landlord’s buildings and contents, yet you are letting the property as unfurnished and so do not need contents insurance anymore; or
- has your property been standing unoccupied for more than 30-45 consecutive days – and, if so, your current let property insurance may typically be invalid and you will need empty property cover.
Without understanding the specifics of your landlord business, it would be impossible to say anything meaningful about what might be a suitable insurance solution for you.
Given how important your insurance might be to you one day, it’s important not to take wild gambles here or to be unduly influenced by advertising and specifically cut-price type offers.
Looking at a range of options and having qualified input to your decision-making processes, should help you to quickly identify an appropriate option and one which is cost-attractive.