Back to Blog

Landlord insurance update

Posted 17/06/2022 by Reeds Rains
Categories: Landlords/Lettings
Person leaning back in their chair with hands bhind their head

As we’re all well aware, the cost of living is rising across the board. Energy and fuel costs are becoming a big concern for many, food prices are increasing and the amount we pay for all manner of other goods and services is going up – all of which is being attributed primarily to the global pandemic response over the last two years.

Inflation is predicted to hit a 7.5% this year – the highest it’s been since 1992 – and the Bank of England has just increased the base rate to 1.25% For landlords, all this means:

  • If you can’t raise rents by 7%, your rental profits this year could be worth less in real terms if you haven’t managed to reduce your other costs
  • Mortgage interest rates are on the rise, so now may be a good time to lock in a fixed rate
  • Maintenance and repair bills will be increasing, as both wages and the cost of materials rise

…and it may also cost you more to insure your Buy to Let.

Your next landlord insurance renewal: things to consider

In terms of the cost of your insurance premium, the simple fact is that you’re highly likely to have to pay more when you next renew your policy. So it’s worth contacting your insurer now to find out what kind of increase you could expect, then you can budget for it.

The most important thing is to make sure you have the cover you need and are getting value for money, which means double-checking the terms of your policy and what’s included.

To help you, here’s our checklist of the key things to consider:

  • Is the rebuild value correct? Average property prices have risen by double-digits in some areas during the pandemic and the cost of building materials and labour have also gone up a huge amount, so it’s worth checking the current rebuild cost for your property ahead of your insurance renewal date. The Building Cost Information Service has an excellent online calculator, which you can use up to four times in any twelve-month period.

  • Is the policy index linked? This is where the insurer has a facility in place for tracking rises in costs, such as inflation and the price of labour and materials, and then automatically applies any percentage increases to the value of your policy. That way, you’re protected against any cost rises in the wider economy.

  • Are you covered for malicious damage by tenants? Many landlord policies – including Reeds Rains Insurance Services - have this as standard, but it’s important to check.
  • Does the policy cover alternative accommodation costs? If the property becomes uninhabitable, you are obliged to find alternative accommodation for your tenants, which could be costly, so make sure you’re covered.
  • Do you have public liability insurance? This protects you from compensation claims that might be made by a tenant, visitor or tradesperson if they are injured or their possessions get damaged while they’re in your property. In the case of serious injury, claims could include medical bills and lost income, so it’s certainly worth having cover.
  • Is it worth having home emergency cover? This gives you and your tenants 24/7 access to approved tradesmen in case of an emergency, such as a broken window or burst pipes. We offer this as an add-on to your building insurance, covering costs up to £500 per claim with no excess.

Rent protection insurance

As the rising cost of living impacts everyone – and particularly as it comes on the heels of a two-year pandemic – it’s important to consider whether your tenant will be able to continue to afford their rent.

Some may already be starting to struggle financially, and that’s likely to become more of an issue as we move through 2022. Some experts have suggested that wages will need to rise by around 10% this year just to cover the additional cost of regular bills. So, if you don’t already have rent protection insurance, it’s certainly worth thinking about – it can give you great peace of mind for a relatively low monthly cost.

Portfolio Insurance

If you have more than one rental property, it’s beneficial to find an insurer that offers landlord portfolio insurance, where one policy covers multiple properties. A Reeds Rains Insurance Services policy will include the following for landlords:

  • There’s one renewal date and one premium payment, making administration easier
  • It’s simple to add or remove properties
  • The cover is flexible and can be tailored to your requirements
  • The policy can include, as required:

    - Malicious Damage
    - Accidental Damage
    - Public Liability
    - Rent Guarantee and Legal Protection
    - Home Emergency.

To discuss taking out a portfolio policy, you can contact Reeds Rains Insurance Services and request a callback at a time that’s convenient for you via our website.

Get a quote from Reeds Rains Insurance Services

Reeds Rains Limited is introducer to Reeds Rains Insurance Services for general insurance including household insurance, landlords insurance services, rent protection insurance and Legal Expenses Insurance. Reeds Rains Insurance Services is a trading style of First2Protect Limited. First2Protect Limited is an Appointed Representative of PRIMIS Mortgage Network, a trading name of First Complete Ltd, which is authorised and regulated by the Financial Conduct Authority.

Reeds Rains may receive a referral fee from insurance providers for recommending their services. You are not under any obligation to use the services of the recommended providers. The insurance provider may be an associated company of Reeds Rains. 

Signup for Updates

Get the latest news from Reeds Rains direct to your inbox

Signup for Updates

Get the latest news from Reeds Rains direct to your inbox