Being a landlord comes with both opportunity and responsibility, and one of the smartest moves you can make is to protect your investment with the right insurance. But not all landlord insurance policies are priced the same. If you’ve ever wondered why your premium is higher (or lower) than expected, you’re not alone.
Landlord insurance isn’t a one-size-fits-all product. Insurers calculate your premium based on a mix of property-specific, tenant-related, and behavioural factors, all of which affect the level of risk you pose to the insurer. Understanding these factors can help you make informed choices, avoid unnecessary costs, and even reduce your premium.
Let’s explore the key things that influence the cost of landlord insurance.
1. Property Factors
The type, location, and condition of your property play a major role in determining how much you pay for insurance.
- Property Type: Is your rental a flat, a detached house, a terraced property, or a House in Multiple Occupation (HMO)? Generally, more complex or higher-risk properties, like older buildings or HMOs, will cost more to insure due to the greater chance of claims.
- Location: Areas with high crime rates, flood risk, or subsidence issues typically attract higher premiums. The postcode is one of the first things an insurer will consider.
- Condition: A well-maintained, modern property with updated wiring, plumbing, and roofing is less likely to cause damage or require repairs. If your property is in poor condition, expect your insurance quote to reflect the higher risk.
2. Tenant Factors
Not all tenants are treated the same by insurers. The type of tenant and the rental situation affect how “risky” your property is to cover.
- Tenant Type: Tenants like working professionals or long-term renters are generally seen as low risk. On the other hand, students, benefit recipients (DSS tenants), or short-term lets like Airbnb often raise red flags due to a higher likelihood of accidental damage or unpaid rent.
- Occupancy: A property that sits empty for long stretches, between tenants or during renovations, is at greater risk of vandalism, burglary, and unnoticed damage (like leaks). Some insurers may even limit cover for vacant properties or apply a surcharge.
3. Security & Level of Cover
How well you protect your property and how much coverage you choose has a direct impact on cost.
- Security Features: Adding burglar alarms, deadlocks, motion sensors, and CCTV can reduce the likelihood of a claim. Many insurers offer discounts for enhanced security.
- Level of Cover: The more extras you add, the higher your premium will be. Optional add-ons like accidental damage, loss of rent, or legal expenses coverage are helpful, but they do increase the price. Make sure you’re only paying for what you need.
4. Claims History & Payment Habits
Past behaviour is often seen as the best predictor of future claims, and how you pay matters, too.
- Claims History: If you’ve made several claims in recent years, insurers may see you as a higher risk. Even if the claims weren’t your fault, they can still influence pricing.
- Payment Method: Paying monthly is more convenient, but it often comes with added interest or admin fees. If you’re able to pay annually, you’ll usually save a small percentage.
5. Smart Ways to Save
The good news? There are practical ways to lower your premium, without compromising on essential protection.
- Shop Around: Don’t just auto-renew. Use comparison sites, contact brokers, and check specialist providers for the best deal.
- Improve Security: Even small upgrades like installing motion-sensor lighting or upgrading locks can earn you a discount.
- Tailor Your Cover: Avoid paying for add-ons you don’t need, especially if you already have other protections in place.
- Pay Annually: If you can afford it, annual payments usually work out cheaper over time.
Take Control of Your Premium
Landlord insurance is an essential safeguard, but it shouldn’t break the bank. Understanding the factors that affect your premium puts you in control. From the type of property you rent out to the tenants you accept, each decision influences your level of risk (and your insurance costs).
Take time to evaluate your current policy, consider whether your needs have changed, and always get multiple quotes. A little effort now can lead to meaningful savings and better peace of mind. Ashburnham Insurance is on hand to help you find the ideal policy to suit your property portfolio. Get in touch with us on FREEPHONE 0800 1696137 for your bespoke, personalised quotes.