Organising Landlord Building Insurance

I haven’t blogged in a few days, but that’s purely because there hasn’t been much to report. I’m at the point where I found the house I wanted to buy, I made an offer, the vendor accepted, and now it’s over to our Conveyance Solicitors to grind through all the paperwork behind the scenes.

On my part, there has been no real activity; I guess this is the calm before the storm. I imagine there will be a lot of periods during this transaction where I’ll have to sit around and wait whilst all the surveys and paperwork is being completed. They should either make the process of buying a house quicker or more entertaining.

Saying that, I did manage to arrange some Landlord Building Insurance earlier today. The policy covers the building, not content.

Since I’ll be letting the property unfurnished, there is no need for me to insure any content inside the property; that will be up to the discretion of my tenant to insure his/her personal belongings (depending on whether they have anything worth insuring).

Finding the best Landlord Insurance deals

As I was looking through various Landlord Insurance websites, it became apparent that it’s an extremely competitive market, so it was definitely worth shopping around for the best deal.

I would personally recommend the following three methods of tracking down the best deal:

  • Comparison websites– by far the best method is going onto comparison websites because they do all the hard work for you. You simply enter your details once and they’ll search through hundreds of insurance companies, finding the best deals for you. A few of the better known comparison websites are, Money Super Market, Compare The Market and Confused.
  • Building Society/Bank– it might also be worth checking with your building society / bank, especially if you have a good relationship with them. They some times have good offers for their good customers.
  • Google it– it’s always worth throwing in a few Google searches like, “Cheap landlord insurance”- you never know, you might turn over a gem.

What affects the cost of Landlord Insurance?

The cost of landlord insurance will depend on several factors, and it’s also very much dependent on each insurance company, as they value risks differently. However, here are the main factors:

  • Value of property
  • Location of property
  • Size of property
  • Local crime rates
  • Environmental risks e.g. flooding
  • Previous claims
  • Smoke/burglar alarm installation
  • The number of occupiers
  • Occupation, specifically if you work from home

Annual renewal of Landlord Insurance

Since landlord insurance is so competitive, it’s worth shopping around (by using the methods discussed above) every year before renewing with your current provider. There’s always newer and better products being released onto the market every day.

Update (a few years later): When it came renewing my insurance policy, I saved over £200 just by shopping around! So it’s definitely worth doing! You can read more about how I saved so much over at my landlord insurance renewal guide.

The difference between “landlord building insurance” and “home building insurance”

Just to clarify, there is a difference between the two, and it’s imperative you bear that in mind when choosing your policy.

Home Insurance covers an individual’s residential home. Landlord Insurance covers buy-to-let properties. So when you’re getting your landlord insurance policy, make sure it is specifically for buy-to-let properties, otherwise God forbird, if you need to make a claim your policy won’t be valid… and consequently, you’re unlikely to see a penny of it.

The Landlord Insurance policy I went for

I spent a few hours trying to track down the best insurance policy in terms of what I was being covered for, and value for money (of course). I eventually went with my building society (who I do have a good relationship with), Halifax. I was quoted £120 for the year, which I didn’t think was bad at all. That’s for a 2 bedroom, end of terrace, buy-to-let policy.

While applying for the policy, Halifax did ask me a lot of questions about the property and the occupants. Of course, that was a problem. Firstly, I didn’t legally own the property yet, so I obviously didn’t have any tenants (the occupants). I explained the situation, and they took that into consideration while offering me the policy.

I needed to organise the Landlord Insurance at this point because most lenders require an insurance policy to be in place before being able to authorise a loan.

After I legally own the property and have tenants, I will need to contact Halifax and update the details of my policy. Depending on the details, it may reflect on the cost.

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