Beware Of Making Small Claim On Your Landlord Insurance

Thursday, August 21, 2014

Beware Of Making Small Claim On Your Landlord Insurance

Beware Of Making Small Claim On Your Landlord Insurance

Small Landlord Insurance Claims Can Increase Premiums By 20%

UK private rental sector (PRS) landlords are being warned about making claims for small amounts on their landlord insurance for damage in rental properties, with an expert claiming that the loss of a no claims discount (NCD) and increased premiums could seriously affect the financial well being of landlords.

Richard Burgess, director of Cover4LetProperty, says a single small claim could see the cost of an annual landlord insurance policy increase by 20%, stating: “With some policies offered by other providers, a 20% NCD would be automatically deducted from the cost of the annual premium, so that landlords get affordable cover. Of course, should a claim be made on a policy, then at renewal, the new cost will not include the no claims discount, meaning that the insurance premium will increase dramatically. In the long run, landlords could end up paying out a lot more for the cost of their insurance cover than if they had not claimed for a small amount”.An example is a landlord who is forced to make a small claim for £200 (GBP) to cover damage to his rental property because he has cashflow issues, as the policy has a £100 (GBP) excess he receives £100 (GBP) from the insurer when the claim is approved. But at renewal time the landlord will typically find that the cost of their cover has increased by around 20% or more.

With the average annual premium on landlord insurance being £208 (GBP), this means that they will pay £249.60 (GBP) and then they will need to rebuild their no claims discount back up over the coming years.

Legal 4 Landlords offer landlords a much wider choice of insuance products for landlords and their tenants, policies that really make the difference between profit and peril.

Tenant Liability insurance would be a better alternative for landlords to ensure that they do not face increased premiums should they be forced to make a claim on their landlord insurance policy, as the cost of the premium can be included in the annual rental price of rented property and thus paid by the tenant. A tenant Liability insurance policy can also help tenants to protect their hard saved deposit should accidental damage occur in rented property during the term of their tenancy.

This was written by Mike Clarke. Posted on at 11:30 am. Filed under Insurance. Tagged , , , , , , , , , , , , , , , . Bookmark the permalink. Follow comments here with the RSS feed. Both comments and trackbacks are currently closed.