When we are talking about landlords insurance, this covers four main areas. The building itself, any contents you leave in the property, property owners liability and loss of rental income. There are other additional covers, but 99% of policies will allow you to include these four items.
As we have seen in the press this week, the number of people renting has increased by nearly 40% in the past two years. This does not mean that we are going to get a return to the boom time of buy to let (remember when you just had to phone your bank and they would give you £100k to buy a city centre flat….).
What it does mean is that the sensible property investor, with a large deposit and a good idea of the actual rental income they will receive, can now approach their bank to get some proper finance. Whereas in the past two years this has been very difficult.
As part of this process, the bank will ask you many things, including what you expect the annual insurance costs to be. Now, the only way of getting a proper confirmed written quote is to speak to a business insurance broker. There are of course numerous sites that give quotes, but you really are better off speaking to a human being.
Now, that is how you get a written quote, but what if you just want an idea? The following is not in any way meant to be a binding quote, but it is an idea of the premium you are likely to be charged annually.
The premium is calculated based on the re-building sum insured. This is not the purchase price but the cost to rebuild. If it is mortgaged, you will have a valuation from the mortgage company. Take this figure and apply a rate of 0.20%. Of course, it depends where the property is, your claims experience, the construction and a whole host of other factors, but this will give you an idea. For a £100,000 house you would be looking to pay around £215.00 per year, once the insurance premium tax is included.
For contents, you can use a percentage figure of 0.75%.