It’s no secret that insurance is largely calculated based on the property’s zip code, tenant type, flood risk, crime rates, etc. Insurers also increase premiums for city locations for no reason other than the consumer expects city prices to be higher.
As far as student rental property owners are concerned, homeowners who need an HMO insurance policy can expect to pay large premiums if the zip code is remotely close to a city university. HMO homeowners insurance near any of the London universities is automatically inflated, just like in Cambridge, Manchester, Leeds, Edinburgh etc. There are slightly higher risks to an insurer when the property is rented on a multi-tenancy basis to students, but the price increases outweigh that risk.
It’s vital that homeowners avoid the big mainstream brands and insurers that run TV ads, and dig into what’s actually available to them. Insurance is a mass market, there are hundreds of insurers and underwriters who want a piece of that city’s business and are willing to offer more competitive deals, but you have to shop smart!
HMO homeowners insurance is a niche product that requires a specific underwriting, and by choosing a specialty insurer, and not just the big names that immediately come to mind, savings can be achieved. For example, if you rent your property to PhD students, some insurers will classify those tenants as working professionals. This can cut the cost of insurance for the landlord in half. It is not a fact of diffusion because the type of Insurers that offer these savings are not stuck in all the media. Insurers like Ageas, Lloyds of London, Vasek, Equity Redstar and many more, all well-known and established underwriting companies, but you don’t hear their name on TV or radio.
There are many ways to keep HMO insurance costs manageable, and many insurers will offer incentives to homeowners, such as interest-free direct debits, to help with bottom line and cash flow; again, this is not always good. known and announced fact. They just sit behind the UK insurance brokers, providing specific insurance policies to their clients at low cost rates because they don’t need to deal with the client directly and can save money in the business. Customer Service, Advertising Costs, Administration Costs – these are all broker costs, so the Insurance provider can afford to offer better rates.
Going directly to the biggest names will automatically cost you more as a policyholder. Use a broker, especially for niche products. Brokers have access to a wide range of products and deliver a high volume of business to insurers; this allows the Owner to benefit from much more competitive options and premiums. This is particularly true for homeowners who need HMO insurance policies, with zip codes in cities near a university or college.
It makes perfect sense for any property owner to shop wisely and protect their investment with quality insurance.