Many people often assume that a landlord insurance policy is a different type of policy to that of a buy to let insurance cover. The simple answer to that is that it’s exactly the same policy type.

There are many landlords with a second property that was specifically purchased as a buy to let investment to either supplement their income or for future growth as a result of price increases in the property market.

A typical buy to let policy will include cover for the buildings against damage caused by perils such as fire, storm, escape of water, flood etc. The policy also normally includes some form of property owner’s liability and a loss of rent cover with typical values of £2,000,000 for property owner’s liability and 20% sum insured of the building value for loss of rent.

Additional optional covers are available on most buy to let policies such as accidental damage, landlord’s contents, legal expenses and rent guarantee cover. These optional extra covers will usually incur an additional premium.

What can you do to get a cheap buy to let insurance policy? The type of tenants that you have plays an important role in calculating the premium for your buy to let landlord’s policy. Professional tenants and working class tenants are deemed to be a lower risk category than tenants on DSS benefits and as such will result in cheaper quotes. There are many different types of tenants for a landlord to choose from for their buy to let property. Professionals, students, DSS, asylum seekers, shared tenants under Houses in Multiple Occupation (HMO) licence.

Insuring the correct buildings sum insured is also crucial in both saving money but more importantly for not underinsuring. Even though the prices of houses have come down in the current economic climate this does not mean that the cost of rebuilding the premises has also gone down. Most home insurance policies that are available through the comparison automatically give sum insured for up to £500k or even £1m but this doesn’t mean that the cost of rebuilding is that high. If you over insure your home on a buy to let insurance policy then you will, potentially be paying a far greater premium than you should.

For further information on buy to let insurance and landlord insurance please contact Active, the UK’s leading brokers for all types of property insurance.