Insurance claims are pushing Insurance premiums higher and higher…. The more you can demonstrate to an insurer that you have claims under control the more you will save on your premiums.
We have tried to put together a list of the top 5 landlord claims along with some tips and useful information on how you can help manage and mitigate some of the worst effects of these on your own business.
- Escape of Water – damage caused by leaking pipes, shower trays, baths, freezing pipework & water tanks.
This is by far the most common of all claims that we see. One or two in isolation are of no real issue, however multiple claims can result in higher premiums & claims excesses being imposed at renewal.
A few carefully thought-out procedures which may help may include:-
- Check pipes are insulated adequately and heating is on especially in cold spells
- Have tenants report any signs of damp especially to ceilings under baths/showers etc.
- Check tenants know how and where to shut off stopcocks and perhaps consider fitting isolator valves to sinks, baths and showers.
- Check regularly for dripping and/or leaking overflows.
- Ensure tenants have emergency call out numbers for leaks and burst pipes to help catch and repair damage early.
- Damage caused by a break-in or theft from the property
Again a really disruptive incident and costs can quickly escalate with these claims. Insurers generally consider these potentially avoidable and something that could and should be managed by a landlord. If this applies to you maybe you’ll need to look more closely at the security aspect at a deeper level for these exposed and highlighted properties.
- Upgrade external locks to 5-lever mortise security rated locks and add key operated locks to all accessible windows.
- Security lighting and/or the addition of CCTV cameras in bad areas can deter the opportunist thief.
- Unoccupied properties suffer more than most so ensuring junk mail is cleared away from the door regularly.
- The addition of programmable and timed lighting to come on and off automatically if empty.
- Arranging for regular inspection if unoccupied (ideally weekly).
- Storm damage including high winds or flooding
This category of claim is totally outside of anyone’s control and the insurers know that. Flood risks are becoming more important as general patterns of weather are changing year on year. Generally insurers do not penalise flood or storm claims and in the most part extra resources are bought in to expedite storm and flooding claims as soon as possible. Forewarned is forearmed and it is therefore important to know if any of your properties fall into high risk flood areas there will be several steps you could take to help yourself be prepared should the worst happen:
- Check the environment agency’s flood areas of concern for the postcodes that affect you.
http://maps.environment-agency.gov.uk/ (include link to Combined resilience map).
- Consider a separate electrical circuit for upper and lower floors.
- Perhaps have the boiler moved to an upper floor if convenient.
- Inclusion of Non-return valves on waste and sewer pipes.
- If renovating then consider raising the electrical sockets higher.
- MAKE a PLAN – an emergency plan of what to do if the worst happens. Organise options and procedures now whilst there is no pressure or stress.
- For storm claims check and repair the roof at regular intervals (at least yearly) and carry our routine maintenance to ensure they can withstand moderate storms and heavy downpours.
- Accidents or injury caused to a tenant or a Liability issue surrounding the property itself
Any claim would come under the property owner’s public liability section of the policy and usually has a limit of £2M although some policies give £5M as standard.
It is worth knowing that for claims to be considered there must be some form of negligence proved against the landlord like slipping on frayed and damaged carpets, trips on loose or poorly designed bannisters or stairs or poorly-maintained entrance steps do count and will lead to costs being awarded against you as a landlord. Remember that not only the cost of the award needs to be met, but also the cost of defending your position can also mount up considerably. This type of claim if unchecked can be extremely expensive. Most claims can be reduced if you were to undertake or arrange a regular maintenance program with a simple to follow “check-list”.. This might include:-
- Examining the state of the internal flooring as well as including paths, decks and patios outside for trip hazards and potential issues.
- Checking for leaks in the kitchen and bathroom to alleviate any accidental wet slip areas.
- Examine the stairs and banisters for lose or worn areas which could be used by the tenant as the reason for the fall or incident.
- A quick visual examination of the roof areas for any loose or damaged areas which could come off in high winds or a storm.
- Perhaps consider installing shower curtains instead of shower screens that possibly can shatter and cause damage or injury.
- Malicious Damage by the tenants themselves over a dispute or unresolved issue.
At outset everybody thinks the tenant they are letting their property to is reputable, but initially anyone can portray themselves as totally respectable.. Relationships can deteriorate quickly especially if there is an ongoing dispute and even the best perceived tenants can turn bad and cause deliberate damage to your property. This generally manifests itself when the tenant finally leaves the property. Most good landlord policies cover for such an eventuality however there are some simple safeguards you can take at outset to help reduce this occurring to you:-
- Having a robust stance to tenant referencing.
- Asking and holding written formal ID including information from a driving licence etc
- Verifying the tenant’s bank account is the bank account they will be paying the rent from and keeping their details updated.
- Compiling an inventory and taking “before letting” pics both externally and inside the property and making this clear of what is expected from the tenant and how any breech may affect their deposit.
- If the tenancy is new, making sure the tenancy agreement allows for periodic internal inspections say 3-monthly… This alone would put off any potential criminal who was looking at creating a cannabis factory for example… they wouldn’t have the uninterrupted time scale to cultivate the plants.
Although this is not an exhaustive list of every issue that may affect you as a landlord these are some of the more common issues we come across in our day to day activities. Other issues might include an accidental Fire, or loss of rent following a valid claim or indeed loss of rent following an absconded tenant… but whatever the incident, it is imperative you are covered by the correct type of Landlords Insurance policy… Basic home insurance will just not cover you… and if anything goes wrong many of us won’t have the capital reserves to pay the damages from our own resources.
At ELITE LANDLORDS we operate a dedicated national Insurance service and advice on all aspect of cover relating to the modern professional landlord.
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