If you are a landlord, then like a lot of people, you probably regard the cost of insurance as an inevitable and necessary expense – but, at the same time, you’ll want to keep the cost of it as low as possible.
To be on the lookout for what you consider is cheap landlords’ insurance, therefore, is in many ways only quite natural.
Beware of the headline price
One possible problem with products branded as low-priced or cheap landlords’ insurance, though, is that the attractive price tag may have been achieved at the cost of the levels of let property insurance cover provided.
Just looking at the price alone might tell you very little about the insurance cover and protection offered. Looking carefully through the landlord insurance policy terms and conditions may be the only way that you can make sure that your policy does what you need it to do in terms of helping you protect your livelihood as a landlord.
What is cheap landlord insurance for you may not be so for someone else
Also, what you consider to be the cheapest landlord insurance for you may be different from that of your other contemporaries and fellow buy to let colleagues. That is because not only will your requirements differ for the type of building insurance you arrange, but your very perception of cost-effective landlord insurance may do too. Your landlord insurance needs to match your own unique requirements and financial circumstances.
So that you may feel better informed about your landlord insurance options – including the cost and the protection offered – let’s tackle some of the most frequently asked questions (FAQs) we’re asked here at Cover4LetProperty.
Does cheap landlords’ insurance really exist?
It’s hardly uncommon to see the banner headline “cheap landlord insurance” liberally spread across many buy to let home insurance advertisements. But does cheap landlord insurance really exist?
That all depends on your perception of just what is cheap insurance. As we mentioned above, what is cheap for one person may not prove to be cheap for another. This is because while one landlord may be looking to pay as little as possible for his or her let property insurance – and will be satisfied with the lowest possible price – another landlord may want a very comprehensive policy with all its bells and whistles.
In the latter case, of course, that is unlikely to be the cheapest policy available even though it represents good value for money in terms of the cover provided.
How do I choose the most suitable landlord insurance?
Clearly, if you compare a buy to let property insurance policy providing a relatively basic level of cover and benefits with one that offers a far higher degree of protection then you might expect to see the more basic policy offered at a lower price relative to the more comprehensive policy.
But if the policy providing broader cover is a good match to your requirements, then you may still consider it to be “cheap at the price” – it represents good value for money.
Perhaps the most suitable way of finding cover that meets your needs and at a price that you find realistic is by comparing landlord insurance policies (or let us make those comparisons on your behalf by using our landlord insurance quote service). By making those comparisons, you can weigh up which one offers you the most suitable level of protection and at the most attractive cost.
Remember that all buy to let insurance policies will differ in certain respects. Some might offer the following benefits and features as standard or optional cover, for example, while others may not:
- cover for the legal fees that arise from pursuing or defending an insured risk – that may even include situations where you did not win the case (but typically this would not cover situations where you were taking legal action against tenants for eviction or the recovery of rent arrears);
- trace and access cover – this is cover that will allow you to recover the costs associated with a tradesman’s explorations to find the origin of a problem (up to pre-agreed limits);
- malicious damage by your tenants – such cover may not be typical on some buy to let property insurance but is offered as standard with the policies we arrange;
- subsidence – once considered an essential part of all buildings insurance, not all buildings insurance policies of today will provide it as standard and that may leave you very significantly exposed unless you opt to pay an additional premium;
- loss of rent cover – you may suffer this surprisingly easily if your property is rendered un-rentable due to an insured event that makes your property temporarily uninhabitable (specified maximum limits may apply); and
- full tenant flexibility – not all policies will offer the same degree of cover irrespective of the nature of the tenants that you accommodate, whereas others may not differentiate between such individuals as the unemployed, students, or recipients of benefits.
The bottom line may be simply that what is cheap landlord insurance for someone else may be neither cheap nor suitable for you. It is always advisable to read the policy carefully and study its benefits thoroughly before starting to think about its pricing level.
How much does landlord insurance cost?
Once again, this will depend, of course, on your specific needs, requirements, and circumstances. As we have mentioned, different landlords will have different needs. What is more, your landlord insurance cover and the options for the premiums to pay will vary from one landlord insurance provider to another also.
At Cover4LetProperty we are committed to helping you to understand how you might influence the cost of your buy to let cover and the following points might help:
- if your business involves letting property on an unfurnished basis, you may not need contents cover – arranging buildings insurance cover only plus any necessary liability indemnity insurance might enable you to reduce your costs;
- similarly, some policies may welcome your use of additional security precautions such as burglar alarms and upgraded locks on doors and windows (above those specified as necessary within the policy document), with reductions in premium – to qualify for any reduction in premiums, these may need to be approved and certified devices rather than merely ones that you have bought or made yourself;
- you may have noticed that quotations are occasionally issued on the basis of what is called, subject to excess, which is a sum of money that the insurance provider will expect you to contribute towards any future successful claims and it is sometimes referred to as the first part of a claim – many policies will let you increase the amount of excess on the policy over and above that which is the minimum in return for a discount on the premiums payable;
- shopping around is important, of course, and just as with any other purchase, the price of an insurance policy may vary significantly between insurance providers – remember that the cheapest policy might not necessarily be the one that offers you the greatest degree of security so read the policy detail carefully and try to avoid focusing exclusively on the price; and remember that
- some policies may carry a premium that is influenced by the occupancy details of your property in terms of tenant numbers – smaller letting unit numbers per property may result in lower premiums.
Can I use regular home insurance instead of landlord insurance?
If you’re looking for lower-cost solutions, it’s important not to be swayed into thinking that regular owner-occupier home insurance policies will suffice. Such insurance typically is not valid for letting situations and you may find any future claims rejected once the insurance provider discovers that your property is let to tenants.
If your property is mortgaged, your mortgage provider may typically insist that you have buildings insurance in place at all times to protect both your financial interests in the property.
If you have the “wrong” type of insurance (e.g. you use home insurance for a let property), this could be classed as fraud and your mortgage provider could ask that you settle any outstanding mortgage in full immediately.
What is the difference between landlord insurance and home insurance?
The distinction between these two forms of property insurance cover is critically important and one that every landlord (and some owner-occupiers) must understand:
The basic outline
- most property owners want to protect the very substantial investment they have in their bricks and mortar. They usually look to property buildings insurance to help them with that;
- property insurance itself comes in various shapes and sizes with much of that variation being attributable to how the provider of cover interprets the risks associated with any given property and a critical part of that risk assessment considers just how the property is being used;
- in this context, there is a vitally important distinction – whether it’s being used for letting or exclusively owner-occupier purposes;
- that matters because insurers typically see let properties as constituting a different risk profile to those that are owner-occupied – so, a landlord letting property will need appropriate property insurance for the risks they face and that typically means landlord insurance rather than standard owner-occupier cover;
The bottom line
- the reality is simple – if your property is being used for letting, you must have specific landlord insurancecover and that typically applies even if you continue to occupy your property and only let out a part of it;
- if you have owner-occupier home insurance for a property being used in full or part for generating rental income, any claims you might make against that policy may be refused if and when the provider discovers – as they almost certainly will – that it has been let to tenants;
How cover differs
- in addition to appropriate cover for the property itself, you may find that landlord insurance varies in other respects too;
- it typically provides enhanced levels of third-party liability cover – providing essential indemnity against your liabilities as the landlord if a tenant, one of their visitors, a neighbour, or even a member of the public is injured on your property or has their property damaged;
- it may provide certain additional “business management” benefits or options relevant to the fact that your property is your business – this might include, as standard or a paid option, things such as legal fees protection, cover for accidental damage caused by tenants, personal accident, and loss of rent. Some of these may be paid-for additional extras;
- as we touched on before, if you have any form of buy to let mortgage, you probably signed a loan agreement committing to keep the property fully and appropriately insured at all times. If you subsequently only use owner-occupier property insurance cover, you might be in breach of that agreement with your mortgage lender and be liable to repay immediately the sum advanced plus interest.
How do I find the most cost-effective and suitable landlord insurance for me?
This may not be so much of the time-consuming chore that you first imagined it to be. Let us do the hard work for you, make the searches and insurance comparisons on your behalf, so that we can match the policies to your precise needs and requirements.
That just leaves you to choose the insurance policy that appears to be the most appropriate for you.
By letting us help – either by getting a quote online or telephoning us – you can find what we believe is appropriate and cost-efficient landlord insurance property cover. This allows you to maintain the level of protection that you need but not at the expense of compromising on the level of cover provided.