The way home insurance works is simple enough: the more likely the insurer thinks you are to make a claim, the higher the cost of the insurance. This is true whether you’re insuring your car, your dog or your house. This is also why reducing the chance that you’ll have to make a claim (in the eyes of the insurers at least) is just as good a way to lower your insurance premiums as shopping around or using a comparison website such as Can Can Cover. Ask your insurer what factors they use to determine your insurance risk then decide if it is worth making improvements to your home.
Make your home a fortress
When it comes to home insurance, the best way to reduce your premium is simply by making your home safer. Nobody’s suggesting that you put unsightly metal bars across your windows, but you could install a security alarm system or add deadbolt locks to your doors to lower the risk of burglars breaking into your property.
Stop the fire
Claims for house fires can prove very costly to insurers, as they have to pay out for both destroyed contents and damage to the building itself. Installing adequate smoke detectors throughout the house is a good way of ensuring damage is minimised should a fire break out, but preventing the fire in the first place is just as important. Some wiring materials are more prone to causing fires (such as aluminium) and wiring that may have been damaged because of renovations or simply degenerated with age could also be a risk.
Just remember that while you might be able to successfully fit a working smoke detector, however good your DIY skills are you should hire a qualified electrician to carry out any rewiring work.
Keep water away
Water damage is something else that can prove costly for insurers. Pro-actively trying to prevent the damage that leaks can cause by installing a leak detector and ensuring there is no damage to your roof could save you money with certain companies.
If your home is particularly old and hasn’t been renovated you could still even have lead piping running through your house. Regardless of the potential health risk associated with lead, it is a sign to insurers that your piping is old and more prone to bursting.
Invest and reap the rewards
Of course, making these changes to your house will come at an initial cost and not all of them will have a large impact on your insurance premium. Doing any of these jobs on your house will reduce the risk of your home and property suffering damage. While your insurance may cover the cost of repairs it can not compensate you for the stress and time taken to make repairs or the loss of photographs or memorabilia. So there is considerable value to performing these upgrades irrespective of there effect on your premiums.
This insurance is more expensive that home insurance because you should really buy cover for yourself in case of potentially ruinous claims against you by a tenant. It is also normal to buy cover for malicious damage that a tenant might do to your property. You can choose not to get legal cover and just to insure the basic structure of the building rather than any of the furniture an appliances. This will greatly reduce your premiums but expose you to much greater risk.
It is worth getting a range of quotes and asking each insurer what steps you need to take to reduce costs. For example fitting sprinklers internally can reduce premiums with some providers. During these discussions it will become clear to you that some insurers are more experienced in Landlord Insurance than others. A more experienced insurer usually means better coverage and a simple claims process.
Finally if you have more than one rental property you can usually get substantial discounts by covering then all with insurance from the same provider.