There is no single answer, and a published average will not tell you what you will pay. Landlord insurance is rated from the rebuild cost of the building, then adjusted for what the property is built of, how old it is, where it stands, who lives in it, whether anyone lives in it at all, what you have claimed for before, and which optional covers you add. This guide explains what an underwriter actually rates, and why two outwardly similar rental properties are quoted very differently.
Search for the cost of landlord insurance and you will be offered a "from" figure within seconds. Those figures are drawn from the lowest-risk case an insurer will accept and tell a real landlord very little. As an FCA-regulated broker arranging cover on an advised basis, we do not publish indicative premiums — a figure quoted without knowing the property, the tenant and the claims record is one we could not stand behind.
The sum insured on a landlord buildings policy is the rebuild cost — what it would cost to demolish what is left and put the property back as it was. It is not the market value and not the purchase price. Market value is driven by location and demand and includes the land; rebuild cost is driven by materials, labour, professional fees, site clearance and compliance with current building regulations, and excludes the land, because the land is still there after a fire. For a straightforward house the figure is normally assessed from BCIS data maintained by RICS; for non-standard construction, listed status or a converted building, we would recommend a professional reinstatement cost assessment.
Most landlord property policies contain a condition of average, and it applies to partial losses as well as total ones. If the property is insured for materially less than the true rebuild cost, the insurer may reduce the settlement in the same proportion as the shortfall — on a kitchen fire as much as on a total loss. Underinsurance is invisible until you claim: the policy is issued, the premium is collected, and nothing reveals the problem until a loss adjuster works back to the reinstatement figure. A lower premium achieved by declaring a lower sum insured is not a saving.
Once the sum insured is settled, the physical characteristics of the building do most of the remaining work — construction type, age, roof, and any history of movement. Insurers also rate who lives in the property, and more sharply than most landlords expect. That is not a judgement about people: it reflects two things an underwriter can observe in claims data — how long tenancies tend to last, and how often the property is left unattended. How far insurers distinguish between tenant types varies widely from one insurer to the next. Location is rated at postcode level and, for flood, often at individual address level, which is a factor landlords have little control over and are often surprised by.
Standard landlord policies are written on the assumption that the property is tenanted, and almost all of them contain an unoccupancy clause: after a stated continuous period without occupation — commonly thirty, forty-five or sixty consecutive days — cover is automatically restricted to a limited set of perils, while escape of water, theft, malicious damage and accidental damage fall away. The premium does not change; the cover does. Short gaps between tenancies are rarely the problem — refurbishment, probate or a long void are, and those normally call for a dedicated unoccupied property policy arranged in advance. Landlords with several properties often insure them one at a time simply because that is how they were acquired; a single portfolio policy changes how the risk is rated and consolidates the renewal. Insurers normally ask for three to five years of claims history across all your properties, and frequency tends to affect the rating more than severity. The excess, and any voluntary increase to it, moves the premium in the opposite direction.
Most of the difference between two landlord quotes that look alike sits in the optional covers rather than the buildings rate — accidental damage, landlord contents, loss of rent, legal expenses and rent guarantee. And a premium can move at renewal when nothing about the property has changed, because insurers rate forward for the expected future cost of settling claims across the whole book, and because insurer appetite for residential lettings shifts. An insurer actively writing the sector will rate the same property differently from one accepting it reluctantly.
Cover is subject to underwriting, insurer terms and acceptance