Beware of making small claims on your landlord insurance
Landlords are being warned not to make claims for small amounts on their let property insurance – as any loss of a no claims discount (NCD) could see the cost of their annual premiums increase by 20%.
Richard Burgess, Director at let property insurance specialists Cover4LetProperty, explains: “Certainly with our policies - and with some of those offered by other providers too – a 20% NCD is automatically deducted from the cost of the annual premiums, so that landlords get cost-effective, affordable cover.
“Of course, should a successful claim be made on a policy, then at renewal, the new cost will not include the no claims discount – meaning the premiums will appear to increase quite dramatically”.
Mr. Burgess gives an example:
- a landlord makes a small claim for £200;
- the claim is approved, and the landlord receives £100 from the insurer (as the policy has a £100 excess amount);
- at renewal time, the landlord will typically find that the cost of their cover has increased by around 20% - maybe more. With the average annual premium amount being £208*, this means that they will pay £249.60;
- after that, they will need to rebuild their no claims discount back up over the years.
He says: “In the long run, landlords could end up paying out a lot more for the cost of their cover than if they had not claimed for a small amount. We suggest that in the event of a claim, in the first instance you contact your broker for advice, as that is what brokers are there for”.
*Cover4LetProperty statistics 2013
Richard Burgess, MCIM, ACIEH, Director at Cover4LetProperty, telephone: 0845 863 9558 or email: firstname.lastname@example.org
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