How To Find Cheap Landlord Insurance
Whilst everyone sets out with the intention to obtain insurance so that they can save money when it comes to claims, ironically, money can just as easily be wasted when a policy is not suited to your individual business needs. There are many simple ways to reduce your premium costs, and this amount can be pretty significant. Identifying the types of cheap landlord insurance, you need and these pairing them together with the right level of coverage is beneficial to safeguard your business from accidents in the most cost-effective way possible.
How To Find Cheap Landlord Insurance
Whilst everyone sets out with the intention to obtain insurance so that they can save money when it comes to claims, ironically, money can just as easily be wasted when a policy is not suited to your individual business needs. There are many simple ways to reduce your premium costs, and this amount can be pretty significant. Identifying the types of landlord insurance, you need and these pairing them together with the right level of coverage is beneficial to safeguard your business from accidents in the most cost-effective way possible.
The most obvious way to decrease your insurance costs is, of course, to decrease your coverage. Although it is essential to have enough cover to reflect the needs of your business, we can often overestimate how much we truly need. For example, a landlord renting out only a few buildings with a handful of tenants would not require as high a level of cover as a long-time landlord with multiple properties and hundreds of tenants.
By reducing your building insurance, for example, from £2 million to £1 million, you can save a significant amount of money because the insurance company would decrease your premium to mirror your coverage.
Similarly, having only the policies reflective of your needs is critical. For example, having multiple covers under landlord insurance, which you will likely never claim, is a waste of money, and you should consider whether they are beneficial. Unoccupied property insurance, for example, would not be necessary if you have never left your buildings without a tenant for over one month. In the same way, alternative accommodation insurance when the property is uninhabitable is unnecessary, and tenants usually do not ask for it when considering your services.
Group policies are a valuable way of decreasing premium costs, whereby multiple covers are purchased as one, done so by the same insurance company. For example, a landlord may require liability insurance, buildings insurance, contents insurance and accidental damage insurance.
When bought separately, four individual costs add up and can be expensive to pay. Alternatively, purchasing grouped ‘landlord insurance’, a pre-existing cover made by the insurance company, can provide a discount because they are all utilised for the same purpose. It is also worth researching numerous companies because some may also include the accidental damage policy as part of landlord insurance, so it can be already included instead of having to purchase this as an extra cover.
2. Keeping the Property Safe
When negotiating a premium, all potential safety hazards in a property are noted down. Not only does this decrease the likelihood of accidents happening, but it shows the insurer that there are not many risks involved with insuring the property.
Such things could include:
- Ensuring even flooring.
- Securing handrails and normal-shaped steps.
- Maintaining hygiene by having fresh wallpaper and ventilation and limiting furniture, shelves or hanging paintings.
Cumulatively this limits the chances of tenants slipping or falling, preventing them from injuring themselves.
Another way to keep the property safe is through security measures. For example, having functioning bright lights in front of the property, an alarm system when the door is opened, cameras from all angles and heavy locks indicates that the building is secured. The chances of burglary or vandalism are thus decreased. As theft is one of the top claims that insurance companies have to deal with, proving that you are taking preventative measures will likely result in a lower premium because steps are being taken to avoid filing a claim for this reason.
3. Having Reliable Tenants
Conducting thorough checks when renting a property is vital because having trustworthy tenants implies that the building will be looked after and kept in top condition. No claims of accidental damage or similar will be filed.
Although it is difficult to summarise what a ‘good tenant’ is, some indicators can aid. For example, tenants with no children or pets are less of a risk because, by nature, pets can rip furniture, walls and floors, whilst children as notorious for breaking all kinds of items inside the house. If you are genuinely considering a low-cost premium, having a no pets or children policy may be of use. Furthermore, having fewer tenants also decreases these costs because there are fewer risks due to fewer people living in the space.
4. Excess and Annual Payments
When establishing the level of cover, an excess is also negotiated. This is the price that a landlord must pay before filing a claim so that it can subsequently be evaluated and a payout to be provided by the insurer. Excesses vary based on the type of policy they are concerned with. For example, building insurance excesses are higher than accidental damage or liability because they are more severe and expensive.
Usually, they range from £50 to £2000. By asking for a higher excess when applying for insurance, the insurance company may feel more obliged to lower your premium, and this is because they can deduct that you will not file claims as frequently if the excess is more. Another way to lower the premium is also filing fewer claims. When you have a shorter claims history, the insurance company can see that you will not demand a payout every time a minor accident happens.
Therefore, the risks associated with them insuring you are lower because they will not have to recompensate as frequently, and only when there is a severe accident that threatens your finances.
Insurance premiums can be given one of two ways, either monthly or annually. For example, the average landlord building insurance is approximately £170 per year, which works out to around £14.15 a month. However, it may seem cheaper to pay once a month because the price is less. This turns out to be costlier in the long run. When paying one lump sum to the insurance company, your obligation is completed, and the company does not have to chase you for payments twelve times a year. On the other hand, paying monthly requires more time and dedication for the insurer to communicate and continue this procedure, so that it may cost a little more for this fee.
Cheap Landlord Insurance – To Conclude
In conclusion, landlord insurance can save thousands of pounds when claims arise. However, reducing the premium costs does not mean that you have to compromise on the quality of the insurance. There are various ways to prove that you are reliable and not a high risk to an insurance company.
Find out more about the importance of insurance here.
Other useful links about Business Insurance:
Building Insurance for Landlords
Landlord Contents Insurance
UK General Landlord Insurance
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