Cheapest landlord insurance

More than 2 million of us Brits rent out homes to tenants, and as many landlords can attest to, it isn’t always plain sailing.

While it’s not a legal requirement, landlord insurance can offer you essential protection for risks such as a burst pipe as well as legal cover to recoup lost rent or to pay for liability costs.

In this guide we explain the cheapest types of landlord insurance available and offer tips for getting the right deal for you at a reasonable price.

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• What's in this guide?

  What's in this guide?

  1. What is landlord insurance?
  2. What’s the cheapest type of policy?
  3. When does it makes sense to buy the cheapest landlord insurance?
  4. What affects the cost of landlord insurance?
  5. How can I lower my landlord insurance rates?
  6. Frequently asked questions

What is landlord insurance?

The best way to understand landlord insurance is to think of it as a quilt made up of different types of insurance sewn together to make an insurance policy that is ideal for landlords.

It will generally include buildings insurance to protect you against risks such as fire or flooding as well as liability cover should someone injure themselves on your property.

If you want to add additional layers of protection, such as contents cover or cover for loss of rental income, you will have to pay more.

What’s the cheapest type of policy?

Strictly speaking, there isn’t a cheapest type of policy. However, you will have to decide whether you want a basic landlord insurance policy or whether you want to add on various other levels of cover too.

It’s a bit like deciding whether you want a plain pizza or one with expensive toppings such as anchovies or mushrooms.

So if you’re after the cheapest landlord coverage possible, you might consider leaving out extras policies, such as accidental damage cover or loss of rental income.

There is an obvious downside to this scaling back though – you won’t be protected against certain risks, which could be incredibly expensive in the long run.

When does it makes sense to buy the cheapest landlord insurance?

To put it simply, it makes sense to buy the cheapest landlord insurance if you can’t afford higher levels of coverage. However, it might also be a good idea if you don’t need certain optional policies.

Take contents insurance, for example. If the property you rent is unfurnished, you might not even need to take out this level of cover. Or you could get a cheap policy that only protects the light fixtures or carpets.

What affects the cost of landlord insurance?

The following are some of the factors that can make landlord insurance more expensive:

• Age of the property
• Type of property
• Number of rooms the property has
• Property location
• Risk of flooding
• The profile of your tenants
• How many buildings you are insuring
• Your insurance history

How can I lower my landlord insurance rates?

There are many ways to lower your insurance premiums, including the following:

• Increase your excess. An excess is the amount you contribute towards a claim before the insurer pays out. By agreeing to a higher excess, you’ll get lower premiums.
• Only pay for the cover you need. Don’t take out optional levels of coverage like contents insurance if you don’t really need it.
• Make the property secure. Having security features like a burglar alarm, security lights and CCTV can lead to lower insurance costs.
• Have a no-pets policy. If you allow your tenants to keep pets, your costs can rise as they can ruin carpets or damage the property in other ways.
• Choose your tenants wisely. Insurance companies will increase your premiums if you take on higher risk tenants, such as students, as they are statistically more likely to lead to you (the landlord) making a claim.
• Pay in full. Insurers charge interest if you pay monthly, so paying in an annual lump sum can save you money.
• Minimise vacant periods. Insurers see vacant properties as high risk as there’s more of a chance of it being vandalised or burgled. Keeping vacancy periods to 30-days or less can help you get affordable cover.
• Don’t claim for small costs. Insurance companies will hike your premiums and your excess amounts if you make several claims on your policy. So if you can afford to pay for repairs yourself, it might save you cash in the long term.

Frequently asked questions

• What does Rent Guarantee cover?

  Rent Guarantee offers you protection in the event that your tenant fails to pay rent for a month or more. You can get cover for over £200,000 per claim and there’s no limit on how many claims you can make a year. You don’t have to pay any excess fees either.

  Another benefit is that you’ll get compensation if, upon regaining possession of your property, you discover it needs urgent repairs and so can’t be rented out for a while.

  You can get this form of cover as an add-on to a standard landlord insurance policy, but you’ll have to pay more for this.

• What do I do if I want to rent out more than one property?

  You have two options here.

  One options is to insure each property individually, which might be a good idea if you have several different types of properties in your portfolio. This way you can tailor your landlord insurance for each one, picking and choosing optional policy add-ons such as contents insurance.

  Or you can insure multiple properties under one deal, which could make managing your insurance a bit easier, and some insurers will even give you a discount for doing this.