Holiday let insurance can be a considerable expense, despite the lucrative rental income it can provide. Without insurance, holiday let owners are exposed to all kinds of risks, and many will find themselves unable to apply for a mortgage in the first place. Insurance is costly, but is it possible to reduce your premium whilst maintaining coverage of your most prized asset?
Pass the Keys has done the research, so you don’t have to and rounded up our top tips for reducing the cost of your holiday let insurance premium. Read on to find out more:
Have you over-insured?
First, are you confident that the projection figures for your holiday let are accurate? Overestimating costs such as rebuilding or content value can have a significant impact on increasing your premium, so make sure all the facts are correct before you continue.
Increase your excess
Increasing your voluntary excess is a simple way to lower your premium. But you should only opt to pay a higher excess if you are confident of honoring the excess amount in the future, should the need arise.
Look out for admin charges
Depending on when you took out your insurance policy, you may want to refresh your memory and check that you aren’t paying for any sneaky admin fees that could be driving the cost of your policy upwards. Remember that the cheapest policy might be more expensive than others if additional charges are added.
Switch up your payment plan
While it’s easier to swallow to pay your insurance bill monthly, paying it annually in one lump sum is cheaper as many lenders charge for admin and interest on monthly payment plans.
Be security savvy
A huge factor in calculating holiday let insurance is the security of the property. Unlike the main residence, holiday lets can be left unoccupied for considerably longer periods, negatively impacting insurance prices. Invest in security enhancements for your holiday let, such as visible burglar alarms, CCTV, outdoor lights triggered by a sensor, and double-glazed windows.
If you can’t afford to get a full alarm system fitted, a fake burglar alarm can be an effective temporary deterrent.
Build a strong no-claims background
If you’ve not claimed in several years or never made a claim, you may be entitled to a discount, so it’s worth enquiring about.
Remove expensive belongings
Keeping expensive belongings in your holiday let may be driving up your insurance. If they are not necessary, consider removing them.
Use the same provider
Using the same provider you do for contents or home insurance is likely to save you money, with only one excess payment covering all plans. Having one provider makes the process easier for you to make a claim.
Consider moving closer to your property
You don’t have to move next door, but living in the vicinity can help drive insurance down, especially if you want to make short-letting your main source of income and build a property portfolio. Homeowners who are away from their holiday lets for significant periods pay a premium.
Shop around & split the insurance
Holiday let insurance is comprised of contents and building insurance. Put simply, building insurance covers the structure of your property, and contents insurance covers personal belongings. These two elements can be bought separately, which you may find cheaper.
What factors could be affecting my holiday let insurance?
Several factors will have an impact on your insurance, which are worth bearing in mind before taking out a policy:
- Flood risk: Holiday lets located near a body of water are usually more expensive to insure
- Property size: a larger property will be more costly to rebuild, particularly in a popular tourist area
- Age and property structure: if your property is over 80 years old, a listed building, or built using non-standard material, you are likely to pay a higher insurance premium. Any property subject to subsidence will also find this reflected in insurance prices.
- Claim history: all previous claims, or lack of claims, are considered by lenders
- Location: Areas with high crime rates or severe weather conditions will pay higher insurance costs
To find out more about holiday let insurance, please see this post. Alternatively, if you want to begin a short-let franchise and build a bespoke property portfolio, call us at 02080 502818.