Landlords buildings and contents insurance can make the difference between your success and failure as a property owner in the long run. The peace of mind that comes with hedging against risks to your investment is probably also a big draw of the product.
Clearly, making sure that the policy you take out is appropriate to the situation you’re in and covers everything you want it to is critical. Extras on the policy, such as those to help cover legal costs, may also be attractive. The kicker though is the more you cover, the more expensive your premiums will be. Balancing this expense against the risk you are exposed to is one of the most difficult parts of taking out landlords buildings and contents insurance.
Cover is one thing, but what else affects your premium? What causes your prices to be higher than Joe Bloggs’?
Risk is one of the key factors in calculating insurance premiums. Effectively, risk means the chance of something happening to your property that will lead you to make a claim. A higher risk means a higher premium. Risk is calculated from a variety of variables. Police records, combined with the insurance company’s claims history in your area make up a large proportion of the calculation. A higher rate of theft will clearly be reflected in your premiums. Your property being located somewhere with a history of flooding or other natural disasters would also increase the risk perceived by the insurers, meaning higher premiums for you.
Even the bricks and mortar of your house affect the premiums you will have to pay for landlords buildings and contents insurance. A newer house is much less likely to experience damage from leaks or old wiring than an old house. The design of the roof, as well as that of the drainage system also plays a part.
Your premiums are, then, highly dependent on the property you own. Choosing your property well before you buy it with your landlords buildings and contents insurance in mind can help you bring your premiums down.