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The cost of low cost landlords insurance

If you are a landlord, then like most people, you may regard the cost of insurance as a necessary expense but at the same time, something that you may wish to spend as little on as possible. Looking out for what you believe is cheap landlords insurance, therefore, may only be natural.

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 cover provided.

Just looking at price alone may tell you little that you may need to know about the 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.

Also, what you consider to be the cheapest landlord insurance for you may be different from that of one of your contemporaries. This is because not only may your buildings insurance requirements in terms of the protection offered vary, but your perception of what is cost-effective landlord insurance may do too. Your landlord insurance needs to match your own unique requirements – including those of your budget.

So you may feel better informed about your landlord’s insurance options – including the cost and the protection offered – let’s tackle some questions relating to landlords insurance …

Does cheap landlords insurance really exist?

It is not exactly uncommon to see the phrase ‘cheap landlord insurance’ liberally sprinkled around some buy to let home insurance advertisements. But does cheap landlord insurance really exist?

It depends on what your perception of what you consider is cheap – 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 coverage and will be satisfied with the lowest price, another landlord may want a very comprehensive policy with all the bells and whistles – and the one they choose may not necessarily be the cheapest policy, but cheap considering the cover offered.

Choosing 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 to one that offers a far higher degree of these things, then you might expect to see that it is more lowly priced relative to the more sophisticated policy.

Yet if the policy providing broader cover is a good match to your requirements, then you may consider it to be ‘cheap at the price’.

Perhaps the most suitable way of finding cover that meets your needs and at a price that you find realistic is by comparing landlords insurance policies (or use our landlord insurance quote service for ease), and weighing up which one offers you the most suitable level of protection and at the most attractive cost.

This is because buy to let insurance policies may differ in many areas including where some may offer the following benefits and features as standard or optional cover, while others may not:

  • cover for legal fees that arise from 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 tradesperson’s explorations seeking 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;
  • subsidence – once considered an essential part of all buildings insurance, today not all buildings insurance policies will provide it as standard and that may leave you very significantly exposed unless you opt to pay an additional fee;
  • loss of rent cover – you may suffer this surprisingly easily if your property is rendered un-rentable due to an insured risk (specified maximum limits may apply);
  • full tenant flexibility – not all policies will offer the same degree of cover irrespective of the nature of the tenants that you have in your property, whereas others may not differentiate between private, student or DSS categories etc.

The bottom line may be simply that what is cheap landlord insurance for someone else may be neither cheap nor suitable for you. It may always be 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?

This isn’t an easy one to answer without knowing the specifics of your exact circumstances. As we mentioned above, different landlords will have different needs. Not only that, but the landlord insurance cover and cost options vary depending on the landlord insurance provider too.

At Cover4LetProperty we are committed to helping you to understand how you might influence the cost of your own cover and the following points might help:

  1. if your business involves letting property on an unfurnished basis, you may not need contents cover. Taking out only buildings insurance cover plus associated third party insurance might enable you to reduce your costs;
  2. similarly, some policies may welcome your use of things such as burglar alarms and additional security locks on doors and windows (above those specified as necessary within the policy document), with reductions in premium. These may need to be recognised and certified devices rather than merely ones that you have made yourself and fitted to doors etc.;
  3. you may have noticed that quotations are occasionally issued on the basis of what is called, subject to excess. The excess is an amount of money that the insurance provider will expect you to contribute towards any future claims and it is sometimes referred to as the first part of a claim. Some policies may enable you to increase the amount of excess on the policy over and above that which is the minimum. If you do so, they may recognise that with substantial further discounts in your premium;
  4. of course, shopping around is important. Just like any other product, the price of an insurance policy may vary significantly between insurance providers. Remember though that the cheapest policy might not necessarily be the one that offers you the greatest degree of security through broad-based cover. So, read the policy detail carefully and try to avoid focusing exclusively on the price;
  5. 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 standard home insurance instead of landlord insurance?

In terms of searching for lower-cost solutions, it is important not to be swayed into thinking that owner-occupier policies will suffice. Such insurance typically is not valid for letting situations and you may find any future claims rejected once the insurance provider realises that your property is being let out.

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 will wish 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 a given property. Part of that risk assessment considers just how the property is being used.

In this context, that usage analysis includes an 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 purposes, you must have specific landlord insurance cover. That typically applies even if you’re occupying your property and only letting 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 typically be refused if the provider discovers (which they probably would) that you were using it for letting purposes.

How cover differs

In addition to the basic appropriateness of the property cover component itself, you may find that landlord insurance varies in other respects too:

  • it typically provides enhanced levels of third party liability cover. That’s necessary because having tenants in a property, as well as their visitors, means a higher likelihood of damage claims against you than might be the case with an owner-occupier;
  • it may provide certain additional “business management” benefits or options commensurate with the fact that your property is your business. They might include the option of 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.

Legal issues

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 contract 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 as much of a time-consuming task as you may at first think. Using our services, for example, may help since we may be able to provide you with landlord insurance quotes only for policies which match your particular requirements.

All you then have to do is to choose the insurance policy that appears to be the most appropriate for you.

For example, you may feel you require standard landlord insurance, with no extra add-ons (such as accidental damage cover). You are looking for landlord insurance that offers the level of cover you need and at a price that meets your budget.

Alternatively, you may want to make sure you have an all-singing-all-dancing policy, that includes many different cover options – as well as being within your budget.

Again, that is all great!

Using our service – either by getting a quote online or telephoning us – can help you find the most 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 cover provided.

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