You know you need it, but the premiums you have to pay for your landlord insurance have a way of cutting into any profits you earn from your buy to let business.
We have written before about saving on the cost of those premiums, but here are some further reminders, tips and suggestions for doing so:
Consult a specialist broker
- although many insurers offer some form of landlord insurance, the product is still something of a specialist product in its own, separate niche of the very wide general insurance market;
- just as there are many different kinds of landlord – from those owning a single property to large portfolios, from those letting houses, to flat conversions or purpose-built blocks – so there are different landlord insurance policies, offering varying degrees of cover and tailored to suit individual circumstances;
- a specialist broker – such as ourselves here at GSI Insurance – may help you negotiate the maze of different types of landlord insurance, to determine the one that suits your particular needs and circumstances;
- a broker may also help you to save money by finding the competitively priced policies and those which have lower excess charges whenever you claim;
Nothing more, nothing less
- one of the areas where a broker may also be able to help is in weeding out those insurance policies which offer more extensive cover than you may need – but which you still pay for, of course;
- so, if you want to cut costs, make sure to choose a policy that provides only the cover you need – but nothing less;
- this still allows you to save money by combining the most important elements of cover needed by the typical landlord;
- building insurance, contents insurance, landlords liability insurance and compensation for loss of rental income (following a major insured incident after which your let property is temporarily uninhabitable) – all of which are likely to earn discounts when packaged together;
- you may still tailor each of these elements of cover to suit your particular needs – contents insurance, for example, might only need to be very basic, to cover curtains and carpets in common areas of your let property;
- many insurers recognise any additional security you install as a positive contribution towards your mitigating the risks of loss or damage – and, in some cases, reward you with a discount on the premiums you pay;
- although secure locks on doors and windows are given, of course, you might earn points for installing security lighting, a burglar alarm or CCTV filming;
- a tried and tested method of reducing the cost of many types of general insurance premium is to assume a greater proportion of the risks yourself simply by agreeing to a bigger excess – since an excess essentially represents an uninsured loss and for which your insurer does not therefore need to charge;
- finally, avoid the temptation to spread out payment for your landlord insurance in monthly instalments throughout the year;
- the premium is still an annual charge, so if you pay monthly you are effectively buying your insurance on credit – and paying for that credit;
- far better – and cheaper – to pay the annual insurance premium upfront and in one go.
If you are looking to increase the bottom line profitability of your buy to let business by cutting the cost of your operating expenditure, you might want to try some of these tips and suggestions about your landlord insurance.