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How to cut the cost of your buy to let insurance

If you own a property that you lease out to others, then it is usually a good idea to take out buy to let insurance, also known as landlords insurance.

In exchange for a relatively small monthly or annual fee, you can be cushioned against a number of potential financial blows that can arise when renting out a property. For example, landlords insurance can pay for any legal liabilities should anything happen to tenants, contractors, visitors, or third parties while they are in or near your property. It can also provide you with financial protection against tenants who duck out on their rent payments, making up all or part of the lost rent and paying the legal costs that you incur if you have to chase them through the courts.

However, fully comprehensive buy to let insurance can be quite expensive, and with other mortgage payments on the rise and new legal requirements for landlords coming in, you may wish to find ways in which you can cut the cost of your landlords insurance.

The most obvious way to go about this would be to cut back on the amount of cover that you take out. While this is by no means a bad strategy, you do have to be careful about what you leave out, as if something should happen to or on your property that you are not insured for, you could end up seriously out of pocket. In every case, assess the risk carefully and evaluate whether you would be able to raise the funds required quickly and painlessly enough in the event that something should happen.

Another strategy is to increase the excess on your policy. You can save quite a lot of money this way, but the downside is that if you do have to make a claim, you will have to pay a substantial amount up front. Now, if you were to adopt this approach, and put all the money that you saved in doing so into a high interest savings account, then you would have enough to cover the excess in an emergency after a few years, and if you didn’t need to claim on your policy, you would still have all the money that you saved. However, this policy does leave you somewhat exposed should anything happen before you have saved the requisite sum of money.


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