When it comes to landlord insurance, one of the biggest factors influencing your premium is location. At Ashburnham Insurance, we’ve seen how the postcode of a rental property can significantly sway the cost of cover. That’s because insurers assess risk, and where your property sits on the map plays a major role in that risk profile.
Whether you’re a seasoned landlord or just getting started, it pays to understand how different location-based risk factors can push your premiums up or down. Here are some of the key ones.
Crime Rate
Properties in areas with higher crime rates tend to carry higher premiums. It’s not just about burglaries, though they’re a major concern. Vandalism, arson, and anti-social behaviour also affect how insurers assess the likelihood of claims. For example, a property in an area with frequent break-ins or reports of damage will be seen as a higher risk.
Insurers use crime data linked to postcodes to determine these risk levels. Even a few streets over can make a difference. If your property is in a high-crime urban zone, expect your premium to reflect that added risk.
Flood Risk and Environmental Hazards
Flooding is a growing concern across many parts of the UK. Properties in flood-prone areas often face significantly higher premiums or may require specialist insurance. Similarly, proximity to rivers, coasts, or known floodplains will likely push the cost up.
But it’s not just floods. Subsidence risk, coastal erosion, and even proximity to industrial sites can increase premiums. Tools like the Environment Agency’s flood risk maps are often used by insurers to assess this exposure.
If your property has experienced a flood in the past or sits in an area that’s been flagged as high risk, it’s crucial to disclose this when arranging cover. Failure to do so could invalidate your policy.
Tenant Demographics
Who you rent to can also influence your premium, and location often dictates the tenant demographic. For instance, areas near universities tend to attract student tenants. While this isn’t inherently negative, students are sometimes seen as a higher risk group due to shorter tenancies and potential for wear and tear.
On the other hand, properties in commuter towns might be more likely to house professionals or families, which insurers may view as lower risk. Areas known for Houses in Multiple Occupation (HMOs) also tend to see higher premiums because of the increased risk of damage and more complex liability issues.
Local Infrastructure and Emergency Services
How close your property is to emergency services can affect insurance costs. A home near a fire station or police station may see lower premiums because help is likely to arrive quicker in an emergency.
Access to good transport links, modern utilities, and updated building infrastructure may also be seen as reducing risk. Conversely, rural properties or those in more remote areas can be more expensive to insure due to slower emergency response times and higher rebuilding costs.
Property Demand and Value Trends
Location affects not just risk, but value. High-value areas usually mean higher rebuild costs, which can lead to higher premiums. But it’s not just about current value, insurers also look at trends. If an area is on the rise, premiums might stay stable. If it’s in decline or has high vacancy rates, that could suggest economic instability, which may push premiums up.
Void periods (times when the property is unoccupied) are also a risk factor. Properties in less desirable locations may be harder to let, increasing the chance of them sitting empty, and vacant properties are more prone to issues like vandalism, leaks, or undetected damage.
What Can Landlords Do?
While you can’t change your property’s location, there are steps you can take to reduce your insurance premiums:
- Invest in security: Alarms, strong locks, CCTV, and good outdoor lighting all help.
- Maintain the property: Regular checks and upkeep reduce the risk of claims.
- Be honest: Always provide accurate information about the property and tenants.
- Choose tenants carefully: References, credit checks, and proper vetting help lower risk.
- Talk to your broker: At Ashburnham Insurance, we help landlords find the best cover for their unique situation. We understand the impact of location and work with you to make sure your policy is tailored, not generic.
Ashburnham Insurance Can Help
Where your property is located isn’t just about curb appeal or rental yield; it plays a major role in what you pay for landlord insurance. Crime rates, environmental risks, tenant types, and even proximity to services all feed into the final premium.
By understanding how these location-based factors affect your insurance, you can make smarter investment decisions and take proactive steps to manage your risk. And when it comes to choosing cover that fits, Ashburnham Insurance is here to help. Call us on FREEPHONE 0800 1696137.