Once upon a time, arranging insurance for a rented property used to be extremely time consuming. Only a few years ago, if you rang your home insurer for a quote for your new investment, they would usually react as if you had just asked them a question in Esperanto and then be heard in a muffled whisper saying to a colleague, “ Oi., Cheryl! Got some sort nutter here who wants a business quote or something – what do I say to them?” After a few minutes of enduring Greensleeves, they eventually suggest you go to a specialist, “I er, think Lloyds do them....?”
Fortunately the massive boom in the buy-to-let market over the past decade made underwriters think about their stance and it’s now readily available from pretty much any insurer you have ever heard of. While most major underwriters’ home insurance policies are quite comprehensive as standard, unfortunately there can be huge differences between them when choosing a buy-to-let policy.
These differences are of course often reflected in the price, and even the big names can let themselves down.
The good things to check are:
Perils: Is the policy ‘standard’ or ‘all risks’? All risks extends the cover to include accidental damage, usually for about 10% extra on the price
Property owner’s liability. This should be a standard inclusion for even the most basic property policy, to protect you against the ‘blame and claim’ brigade. Surprisingly one or two of the big names decide to only include it as an option.
Loss of rent. This covers you for lost rental income should the property be unusable following a claim. (Rent guarantee cover is different and will cover your income if the tenant fails to pay for other reasons. This is usually only arranged separately and with a specialist underwriter.)
Policy excess. Generally expect a £100 excess, although many are now £250, increasing to £1,000 for subsidence claims.
Damage by tenants. This is a problem to some underwriters and claims for tenant damage can be difficult to assess and expensive to repair. Insurers now often exclude damage by ‘persons legally on the premises’ altogether, whilst some will have a large excess or small limit. There are a few quality underwriters out there that don’t have any restriction for this and if you find one, they are definitely worth paying a little extra for.
As a guide price, most buy to let premiums come in at around £200 for £100,000 of buildings cover. Some insurer’s premiums can be as low as half this, but invariably the cover is ‘no frills’ at best, so be careful when accepting a quote that is suspiciously cheap.
Fortunately the massive boom in the buy-to-let market over the past decade made underwriters think about their stance and it’s now readily available from pretty much any insurer you have ever heard of. While most major underwriters’ home insurance policies are quite comprehensive as standard, unfortunately there can be huge differences between them when choosing a buy-to-let policy.
These differences are of course often reflected in the price, and even the big names can let themselves down.
The good things to check are:
Perils: Is the policy ‘standard’ or ‘all risks’? All risks extends the cover to include accidental damage, usually for about 10% extra on the price
Property owner’s liability. This should be a standard inclusion for even the most basic property policy, to protect you against the ‘blame and claim’ brigade. Surprisingly one or two of the big names decide to only include it as an option.
Loss of rent. This covers you for lost rental income should the property be unusable following a claim. (Rent guarantee cover is different and will cover your income if the tenant fails to pay for other reasons. This is usually only arranged separately and with a specialist underwriter.)
Policy excess. Generally expect a £100 excess, although many are now £250, increasing to £1,000 for subsidence claims.
Damage by tenants. This is a problem to some underwriters and claims for tenant damage can be difficult to assess and expensive to repair. Insurers now often exclude damage by ‘persons legally on the premises’ altogether, whilst some will have a large excess or small limit. There are a few quality underwriters out there that don’t have any restriction for this and if you find one, they are definitely worth paying a little extra for.
As a guide price, most buy to let premiums come in at around £200 for £100,000 of buildings cover. Some insurer’s premiums can be as low as half this, but invariably the cover is ‘no frills’ at best, so be careful when accepting a quote that is suspiciously cheap.
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