If you’re renting out a property, landlord insurance is one of the most important tools to protect your investment. But like any insurance product, the cost of cover — known as the premium — can vary widely depending on a range of factors.

Understanding what influences landlord insurance premiums can help you make informed decisions, avoid overpaying, and ensure you have the right level of cover for your needs. In this guide, we break down how premiums are calculated, what factors affect the price, and how to potentially reduce your insurance costs.

What Is a Landlord Insurance Premium?

A landlord insurance premium is the amount you pay (either monthly or annually) for an insurance policy that protects your rental property. This can include buildings cover, contents cover, liability protection, loss of rent, and more — depending on the policy you choose.

The premium reflects the risk the insurer takes on. Higher-risk properties or tenants typically mean higher premiums, while lower-risk situations may result in cheaper insurance.

What Factors Affect Landlord Insurance Premiums?

Several variables are taken into account when an insurer calculates your premium. These include:

1. Property Location

The postcode of your rental property plays a major role. Areas with high crime rates, flood risks, or historical claims tend to attract higher premiums. For example, a property in a flood-prone region or a city centre with higher burglary rates may cost more to insure than one in a quiet rural location.

2. Property Type and Size

Larger properties or those with complex construction (e.g. listed buildings, timber frames, or flat roofs) often have higher rebuild costs, which can increase your premium. A modern, purpose-built flat is generally cheaper to insure than an older house with multiple extensions.

3. Tenant Type

Insurers assess the perceived risk based on who occupies the property. Renting to professionals or families is often considered lower risk, while tenants such as students, DSS recipients, or short-term lets like Airbnb may raise the premium due to the perceived increase in potential claims.

4. Level of Cover

Naturally, the more comprehensive your cover, the more you’ll pay. Policies that include extras such as accidental damage, loss of rent, legal expenses, or landlord liability insurance will cost more than a basic buildings-only policy.

5. Claims History

If you’ve made insurance claims in the past (on any property), insurers may see you as a higher risk. A history of frequent or large claims can significantly increase your premium.

6. Security Features

Properties with strong security measures often enjoy lower premiums. This includes:

• Approved door and window locks

• Intruder alarms

• CCTV systems

• Secure gates or fences

Demonstrating that your property is secure helps lower the risk of break-ins or vandalism.

7. Rebuild Cost

The cost to rebuild your property from scratch in the event of a total loss (not the market value) will affect your buildings insurance premium. The higher the rebuild cost, the more the insurer might have to pay out — and the higher the premium.

8. Excess Amount

Your excess is the amount you agree to pay towards any claim. Opting for a higher voluntary excess can reduce your premium, but make sure it’s affordable if you ever need to make a claim.

How to Lower Your Landlord Insurance Premium

While insurance is a necessary cost, there are ways to reduce your premium without compromising on essential cover:

• Shop Around: Don’t renew automatically with the same insurer every year. Compare policies and prices from multiple providers.

• Bundle Policies: If you own multiple properties, consider a landlord portfolio insurance policy, which can be cheaper and more convenient.

• Install Security Systems: Upgrading locks, adding burglar alarms or CCTV can reduce your risk profile — and your premium.

• Pay Annually: Paying for your policy in one go instead of monthly instalments can save money overall.

• Avoid Unnecessary Add-ons: Only pay for the cover you need. For example, if your property is unfurnished, you may not need contents cover.

• Maintain a No-Claims History: Avoid small claims and handle minor repairs yourself when possible to protect your no-claims discount.

Is Cheaper Always Better?

While it may be tempting to go for the lowest premium, it’s important to strike the right balance between affordability and protection. A cheaper policy might not include key elements like loss of rent, legal expenses, or public liability insurance — which could leave you vulnerable in the event of a claim.

Always read the policy documents carefully, and make sure the cover matches your needs. Paying a little more upfront could save you thousands in the long run.