The Importance of having Specialist Landlords InsuranceThe third most common reason for making a claim was property damage caused by burglars with an average claim of &2,300.
The most expensive claim in the top 10 is &25,000 to repair the damage caused by an electrical fire and the report also explains how insurance premiums can vary significantly according to property type, location, and tenant type.
Often, insurance is the last thing that landlords consider but having a clear understanding of the key factors that go into buying a policy can help to avoid many of the pitfalls associated with them. More and more people are buying this sort of policy online and without the expert advice from a local broker, and as a result it is all too easy to overlook some very important issues.
In a lot of cases , these policies are underwritten on details recorded within a Statement of Fact . Instead of the customer completing a proposal form requiring a signature, the underwriting information is collected by Insurers via a series of questions which then form the basis of the Statement. This document is produced to the client and they are told that they are the material facts that the policy is based upon. Instructions are then given to the client that they need to check the details carefully and any inaccuracies must be flagged up. Any breach of disclosure of these material facts could result in a claim not being paid. It must also be remembered that any changes to the Statement of Fact that occur during the duration of the policy must also be disclosed to the company.
But in our experience, there are some common oversights that landlords make which causes serious issues further down the line.
The type of tenant is a very important factor as there are certain types that some Insurers simply avoid, such as students, asylum seekers and those arranged via the DSS. Insurance companies need to be told of such arrangements so that they can consider whether they want to offer terms or not.
They will also want to know if the premises is unoccupied. The problem often occurs if the premises ,which may have been occupied at the start of the policy, becomes unoccupied later on. Most Insurers allow a period of 30 or maybe 60 days when full cover is maintained , but thereafter it may be reduced to reflect the unoccupancy, for example, removing theft cover and they will certainly apply certain conditions to the policy. For instance they will impose a warranty stating that the water has to be turned off at the mains and the heating maintained at a certain minimum temperature .In this scenario, if there has been a burst pipe and these warranties haven't been met , then Insurers will be within their rights to decline the claim.
There are many more examples I could go through, but suffice to say, even seemingly simple policies such as these are fraught with problems and it is so important that you get the correct advice from the start.
We are finding that Landlord insurance is very competitive at the moment with very keen premiums as it is a class of business that is popular with Insurers. However, its more than just obtaining the cheapest premium, its also important you have the right advice to ensure that the policy is there when you most need it, when you claim. If you are concerned with the cover you have in place, or want to discuss a new quote then please feel free to ring us here at Eastside Insurance on 01792 641624
Ian Bateman - Manager - Eastside Insurance