An ever-growing complex of legislation, rules and regulations – not to mention the expense of keeping abreast of the demands these impose – makes life for the buy to let landlord increasingly difficult.

The confusion and the cost of complying with those demands is especially taxing for those 71% who might be described as “accidental” landlords, says a recent news story.

Whilst landlord insurance may not be a legal requirement – though may be obligatory as part of your buy to let mortgage contract – it is an essential safeguard in an increasingly tough environment. That makes saving money on your landlord insurance a priority.

Here are some tips and suggestions about doing just that:

Shop around

• just as you would before making any important purchase, make a point of carefully shopping around;
• you need to make sure that the landlord insurance you buy is tailored to your specific needs and circumstances, covers all that you require, but leaves out anything you might not, and is, of course competitively priced;

Consult the experts

• since that shopping around is likely to prove more difficult than you first imagine – there are so many competing providers and packages, after all – you might want to draw on the expertise and experience of a specialist broker of landlord insurance;
• a specialist broker may be well-placed not only to advise on the cover likely to satisfy your needs, but also to offer among the most competitive quotes – so, helping you save money;

Consider your market

• the landlord insurance you need is likely to be influenced by your target market as far as tenancies are concerned;
• some insurers, for example, do not cover the risks involved when your tenants are drawn from groups such as students, the unemployed, welfare claimants or asylum seekers;
• if these are included in your potential target market, therefore, consider choosing landlord insurance providers who offer cover for any tenant group;

Avoid voids

• tenants come and tenants go – during that interval between tenancies you are earning no rental income, of course, and so-called “voids” therefore need to be avoided;
• prolonged voids may also have an impact on your landlord insurance, since most policies stipulate that cover becomes severely restricted, or may even lapse altogether, if your let property remains vacant for longer than a month or so;
• in that event, you are likely to need further cover, in the shape of unoccupied property insurance – which, of course, involves further expense;

Excesses

• like practically every other type of general insurance, your landlord insurance is likely to incorporate an excess on any claim you may need to make;
• by sharing the risks with your insurer and agreeing to a higher amount of excess, you are likely to reduce the cost of your premiums – but remember that this calls for a greater personal contribution to the settlement of any claim you subsequently make;

Avoid making many small claims

• since you’ve paid your landlord insurance premiums, you might be tempted to put in any small claim when something gets damaged or lost;
• try to avoid doing so, since a succession of small claims is almost certain to undermine your no claims discount – making next year’s premiums that much more expensive and, potentially, reducing your chances of securing the cover you need in the future.

Landlord insurance remains an essential safeguard for any buy to let landlord – accidental or otherwise – but fortunately there remains a number of ways in which you might save money on the cost of it.

Here you’ll find a hopefully useful list of top tips relating to cheap landlord insurance.

They are:

• don’t look for cheaper landlord insurance!

If that sounds surreal given the title, it’s confirming that it’s important to look for cover that is suitable and cost-effective rather than the cheapest you can find. It is also important that you understand that what you consider to be the cheapest landlord insurance may not be the same as another landlord.

The logic’s simple – if you ever need to make a claim against your policy, you won’t be bothered for a second about how much it cost you, only the cover it provides;

• look for and take advantage of discount opportunities.

Landlord insurance providers may well offer significant discounts if you adopt certain practices and behaviours that will reduce the risk of subsequent claims. For example, some may offer discounts for the use of things such as burglar alarms or approved professional standard locks and bolts on all entry points;

• consolidate your cover.

If you have a number of properties (a portfolio) you might find that it will be typically more cost-effective for you to consolidate your cover through a single provider rather than to split it over several. This is simply the reality that the bigger a customer you are, the more you may be able to use your commercial clout and leverage with the provider concerned in order to get more attractive premiums;

• look for policies that offer the broadest possible cover as standard.

Some policies may offer what appears to be an attractive price but upon a closer inspection, you may find that certain things are not included as standard and will be charged for as optional extras. For example, some policies may exclude certain categories of tenant from their cover unless an additional premium is paid. Other policies may include “any tenant” cover as standard;

• incline towards policies that offer subsidence and trace and access cover included as standard.

This relates to the preceding point but is worth mentioning specifically because not all policies do include these important elements of cover in their standard proposition. If you need to pay extra for them, your costs are going to rise;

• avoid making claims for relatively minor sums of money.

There will probably be a mandatory excess on your policy that prevents very small claims being made but even if your claim is slightly above this level, it might not be in your best interests to progress it. Making numerous small claims for relatively minor sums can put your no claims bonus at risk – and that might be worth far more to you in the medium term than the claim amount at stake;

• keep valuations of your fixtures, fittings and contents, reasonable.

This is perhaps more relevant to landlords offering up-market and designer properties. Even where you are targeting high net worth tenants, remember that the more expensive furnishings and equipment you include in your property, the higher your landlord contents insurance premium is likely to be as a result;

• take a higher voluntary excess, if your insurance provider so permits.

The excess on a policy is the amount that your insurance provider will require you to pay towards the cost of any future claims. Typically, the higher the excess on a policy, the lower the premium you might expect to pay. Some policies may offer you the freedom to increase the level of the standard excess and that again might give you an opportunity to reduce your costs.

Having appropriate landlord insurance is essential (it may even be obligatory in many instances if you have a mortgage on the property) if you’re obtaining rental income from a property you own.

To be absolutely sure what a given landlord insurance policy actually covers, you should read the policy and communicate in detail with an experienced provider of landlord insurance. That’s because, just as is the case with any other form of insurance, it’s perfectly possible that one policy’s cover will differ significantly from another’s.

You’ll want to know exactly what’s included and equally not included, before making your final purchasing decision.

However, as a quick guide, a landlord policy might provide you with cover in the following areas.

Landlord operations

This is more of a loose concept but it’s mentioned here to illustrate an important point.

Many of the things covered by a typical landlord insurance policy may look very similar to a standard owner-occupier policy. It’s imperative though that your policy is explicitly a landlord policy that will cover you and your essentially commercial activities surrounding the property concerned.

A standard owner-occupier policy simply won’t be sufficient even if, at face value, it seems to offer very similar cover.

Property risk

You should also expect to see cover for the basic bricks-and-mortar of your property.

That might include risks such as:

• fire;
• storm damage;
• burglary-related damage;
• flooding; etc.

Once again though, do look closely at the policy’s detail. For example, not all such cover will automatically include risks such as flooding and subsidence.

Contents

This category should offer no great surprises but it’s worth thinking carefully about a realistic valuation of your contents.

Note that even if you’re letting unfurnished, it might be a mistake to assume you have no need for such cover. While fixtures and fittings should typically be included in your building’s cover, the interpretation of what exactly a fitting and fixture is versus contents may differ between insurance providers.

Employers’ liability

Landlord cover might typically not include this as standard because you might not need it. It’s typically an optional extra.

It’s included here for completeness, as the law might demand you have such cover in place if:

• you have employees (whether on a formal contract of employment or not);
• you use casual staff to the extent that an employment tribunal or court might deem them to be de-facto employees.

Public liability

This exists to offer you financial cover in the event that a member of the public is injured (or has their property damaged) as a result of your property.

If that sounds unlikely, remember that people are seriously injured or even killed by events such as slates falling off roofs, falling down the stairs due to loose carpets or slipping on rugs etc.

Business continuity

This is a broad category and might include things such as:

• being unable to let your property out for a period pending it’s repair after storm damage;
• needing to temporarily relocate tenants after damage;
• legal fees if you’re sued by tenants.

Do please note that these things may or may not be covered in a standard policy. In some cases they might again be optional extras.

Summary

For the sake of brevity, this article has only quickly skipped over some of the main aspects of landlord insurance.

It might be sensible to find out more from an experienced provider of landlord insurance cover, such as ourselves at Cover4LetProperty. Call us today on 0800 9707 172 for more information.