How Much Landlord Insurance REALLY Costs

Different types of Landlord Insurances & how much they cost

That’s quite the menu, aye?

Your natural response might be, “I don’t need half of that crap” And you’re probably right, you don’t. I certainly don’t sweep all the items into my shopping basket, because I imagine, much like yourself, you ain’t made of money.

However, you’ll likely be interested in more than just the basic building insurance (I’m guessing). Who wouldn’t be interested in having rent guarantee insurance? (especially in the midst of the current God awful cost of living crisis!)

Key points to consider

Costs are averages and estimates

It can’t be overstated that I’m basing my numbers on publicly available averages, the most common scenarios and personal experience.

Costs will vary depending on personal circumstances, including the extent of coverage required. Plus, it usually works out cheaper if you add on more coverage from the same provider where possible (e.g. building, contents, legal and liability), instead of getting separate policies from multiple providers.

Building insurance is the bear minimum, everything else is extra

I’m hoping this is a no-brainer!

Even though there is no legal requirement for landlords to have building insurance, it’s still considered essential. So if you’re hell-bent on spending as little as possible on landlord insurance (no judgement from me), just make you grab building insurance.

Building insurance will protect your asset, so without it, you stand to lose everything in the event of the worst case scenario striking.

One policy Vs Separate policies

it’s unlikely you’ll be able to get ONE insurance policy from one provider that will cover every type of landlord insurance available (because some are specialist products). However, what you will be able to do is get multiple policies (from either the same provider or a few different ones) that will be able to cover the spread of protection that you require.

For example, one provider might be able to provide you with Building with the option to add-on extras like contents, and legal cover.

But then you might have to go to another provider that offers Rent Guarantee Insurance (RGI) and Liability cover.

Shop around before renewing your policies (and potentially save 50%)

One of the biggest mistakes I see landlords make when it comes to insurance is blindly auto-renewing policies with their existing provider before shopping around for better rates. Alas, that’s definitely the most convenient way to overspend.

Insurance providers rarely ever reward their loyal customers with discount rates (which is actually mind-blowing). In fact, they usually do the complete opposite – hike up the rate, and then like clockwork, blame it on increased operational costs, a tough economy and inflation. Or as I like to call it the shameless landlord insurance renewal scam (yup, of course I’ve thrown a public hissy-fit about it). Alas, many landlords blindly take the bait and accept the new rate, while being completely oblivious to how uncompetitive the rate they’re paying actually is!

Please, for the love of God, shop around! I’ve saved around 50% the last time I did.

From my experience, I’ve always got a substantially better deal by comparing the market at the end of a policy and switching to a new provider. It may sound like a complete ballache, but honestly, it only takes about 20 mins and the saving is worth it.

Insurance is a hedge against disaster, so get what you need and be open to change!

I know, I know! it’s always tempting to opt for the bare minimum (building insurance), but I always urge landlords to remember that insurance is a very cost-effective hedge against disaster. Would you rather pay £150’ish for rent guarantor insurance, or potentially lose thousands in rent in the event that your tenant defaults falls into arrears?

I personally usually get the following coverage (either as individual policies, or bundled into a couple of policies):

• Building insurance
• Rent Guarantor Insurance
• Landlord liability insurance
• Legal expenses

… and that’s why I pay more than the average £180.

I must stress though, what I’m covered for is a tactical and conscious decision. I don’t get contents insurance because all my rentals are unfurnished. I don’t get boiler insurance because my boilers are all relatively new and routinely serviced, and I’ve historically had very little problems with them (that’s because I’m a big believer in choosing quality boilers for rental properties).

Your circumstances might be different, so it’s up to you to hedge your bets in a way that makes sense for your circumstances.

it’s also worth noting that I’m always open to the idea of getting more or less coverage as my circumstances inevitably change (on a per property basis). For example, if I suddenly start incurring extra costs on maintenance costs for a particular property, I may consider getting Maintenance & Home Emergency Cover.

Do I usually make claims and benefit from my insurance? Hell no. Just like most people don’t claim on their car insurance (and therefore feels like a massive waste of money). But I sleep better at night knowing I’m covered if shit hits the fan (which is what insurance is largely all about, peace of mind). However, I have made substantial claims in the past that’s saved me a buttload of money, which has covered my insurance costs for the next decade.

Landlord out xoxo