Being under insured is a greater risk than landlords realise
It would appear that a number of landlords are failing to update their property insurance cover levels with some taking the view that so long as they have a policy, they will be protected. A recent fire claim presented to Total Landlord Insurance for nearly £400,000 has highlighted the need for Landlords to ensure that they are adequately insured.
A fire, which broke out in a block of flats, after a tenant decided to clean car parts with petrol in the kitchen, is set to leave one landlord out of pocket to the tune of £100,000 when he discovered that he had under-insured the property for many years.
Eddie Hooker, CEO of Total Landlord Insurance, said “This is a particularly extreme and unusual case but it does highlight the importance of ensuring that your insurance policy is sufficient to cover the full value of rebuilding the property. In the current financial climate, it is more crucial to look at the levels of cover rather than the bottom line premium.”
Landlords that have taken out policies some time ago are urged to ensure that their cover is still valid and in line with current market conditions. It is also advised that landlords seek professional advice on the cost of rebuilding their properties.
Over the past 2 years, almost 20% of all fire claims settle by Total Landlord Insurance were the result of kitchen fires, 10% due to tobacco smoking and a further 5% caused by burning candles. The remainder of claims related to electrical faults.
Eddie concludes: “properties in multiple occupation are amongst the most likely to be affected by fire. Prevention of risk is as important as having the correct insurance. Landlords, especially those new to the sector, need to understand the correct fire safety provisions including fire exits and wired in smoke detectors. Ensure that your tenant understands their obligations and write fire precaution clauses into the tenancy agreement.”
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