Many insurance providers claim they can insure multi tenanted properties, more specifically HMO properties; however what they do to accommodate them on their schemes is quote them as bedsits! By doing this you end up paying more than you would need to.
Bedsits are a higher risk for insurers than HMO’s, mainly due to the cooking exposure in the rooms, and also the short term in which the tenants are in the rooms for, as bedsits tend to be used on a very short term basis. Whereas HMO’s generally have communal kitchen areas, which means only one area in which any cooking takes place reducing the potential fire risks of a bedsit, and in most cases are let on normal AST’s.
Now the above is not to say your property has been incorrectly insured by your provider in terms of coverage or incorrect information provided more so that you are simply playing too much for it.
When running quotations for bedsits, the market is as limited as HMO’s, but when coming to the quotation finale, there is often if not in all cases an addition % loading to be added to the final premium due to it being a bedsit. This additional % is not something the insurer/provider will or can override, as it will conflict their underwriting criteria.
What you will need to ensure is that your property is correctly insured as a HMO and not a bedsit – I know this sounds very obvious but as aforementioned this is simply the only way some insurers can accommodate HMO properties.
The HMO schemes we use have been designed specifically for houses of multiple occupations, and rates tend to be as cheap a standard let – for example, this week we quoted on a 5 HMO property portfolio in Nottingham, the cost for all 5 was less than £1000!
