The wrong type of insurance is putting a quarter of landlord’s property investments at risk. In order to understand how landlords are mitigating their risk in new market conditions, Simple Landlords polled 500 landlords in the
Emerging Landlord Report.
Up to a third of landlords have insurance that doesn’t fully meet their needs and one in four have a mix of standard homeowner’s buildings and contents rather than specialist landlord policies.
However, many standard policies don't cover the unique risks that come with being a landlord.Smaller landlords often with single properties were the most likely to have the wrong type of insurance, with 28% buying a standard policy.
• 7% of landlords admitted to not knowing if they had insurance or not, and
• 25% had purchased
both specialist landlord and standard homeowners cover – doubling the costs
It’s not just smaller landlords making mistakes. Bigger landlords often have the same policies for different properties. Two thirds with more than five properties say they insure all their properties under one policy, because they believe it’s both cheaper (79%) and faster (79%).
• Over half auto-renew (58%) and only 13% choose to switch every year. Why don’t landlords switch?
• Hassle (30%) was flagged as big a reason as loyalty to the current provider (31%). In fact, more than half (57%) said they found a lower rate when they do switch.
• Saving money was the main reason for switching (77%), six times a greater motivator than finding a better policy (13%).
• Around 86% buy without looking at quality markers like Defaqto ratings, or customer reviews using services like Feefo.
• The median saving for landlords is £35; the average £70.
Many landlords, especially those with growing portfolios, are put off by the complication of moving insurer. But it’s worth shopping around for right cover at the best price and the burden of administration is usually taken on by the insurer.
Even if you have no intention of swapping, never accept an unjustified hike in price. Unless something has changed significantly at your property or you’ve had a major claim, the premium shouldn’t increase up by more than about 5%.
A-Z insurance
jargon buster.
