Do you have the correct cover?
All too often, we at Imperial Claims Consultants, come across landlords, who don’t have any or the right level of insurance cover for their rental properties. This usually only transpires once a disaster has occurred and they look to us for help and assistance following the insurance company declining their claim.
I think to some degree we all treat our property insurance as a financial bind, always looking for the cheapest quote, however it is important to ensure that you obtain the best cover and insure for the worst possible case scenario, we all hope to never need to make a claim, but it is vital that you have good quality cover in place should the need ever arise.
Many Landlords and property owners, think that because they have purchased their insurance policy that they are safe and fully covered, however this is not always the case. Having an insurance policy can be like a lottery, if you don’t fully understand the policy and have checked the small print and adhere to the stipulations there may encounter trouble should you need to make a claim.
Many of us now use online comparison websites, but do you read every line and verify the full information is correct, or are you guilty of just clicking next without fully reading the details of the information supplied.
We have recently dealt with a case of a gentleman who took out a policy online, he answered the basic underwriting questions truthfully, then he went onto the web site of his chosen quote provider. On this site a question was asked “ do you have any county court judgements”? the no box was auto populated with a tick by the the site, not our client. We presume due to him ticking the box on the underwriting questions which asked “have you ever been made bankrupt” to which he truthfully answered no.
The policy this gentleman took out provided great cover for a relatively low premium, however due to the fact that the information provided was not factually correct, the substantial claim following a fire at his rental property was declined by his insurers, despite us gaining the involvement of the Financial Ombudsman who stated, the insurance company were correct in their decision, as this gentleman had ticked to say he’d checked and verified the information provided and it was to the best on his knowledge true and correct, which he had clearly failed to do.
This gentleman, has not only lost a claim which was circa in excess of £125,000, he has also lost his rental income as the property is not habitable, however he still has a mortgage to pay on the property and no cash to carry out the required extensive refurbishment.
Can you afford to lose that type of money?
It is so sad and frustrating when we come across situations like this which are completely preventable.
It is wise to follow these procedures when taking out any landlord or property based insurance policy and throughout the duration of the policy.
Tell the truth
Ensure that all the information provided is factual and honest and updated if your circumstances chance. In the event of a claim insurance companies will verify the information you provide, failure to give the correct information or keep it updated, could result in your claim being refused.
Ensure that your property rebuild costs adequate
This is not the market value, but the cost it would take to rebuild or fully refurbish your property should any claim or damage be extensive ensuring fees and potential demolition are included.
Make sure you know the full and up to date details of your tenant
Report any changes to your insurance company or broker, including :-
- Who they are
- Are they working or on Benefits
- Move in and out dates
- Ensure you or your agent, keep up to date with changes in circumstances
Read your policy, ensure you fully understand your cover
Including any restrictions or stipulations on your policy
Check the details
If you are taking out cover via a phone call, ask for the questions
asked to be emailed to you and respond with an email, therefore
you have a copy of the answers provided and when your policy documents arrive, ensure that you check them thoroughly to ensure no mistakes have been made and all information is true and precise.
As soon as your property becomes vacant, it is important that you
inform your Insurance company immediately.
Many policies have a 30, 60 or 90 day between tenants cover period, however this often does not provide full cover, and you may only have basic cover for Fire, Lightning, Earthquake and Explosion. Therefore if the property was broken into and the boiler stolen, causing an escape
of water, you would not be covered.
It is therefore imperative that once your tenant moves out, you take out empty property insurance, with this type of cover, many policies also require you or your agent to carry out procedures
- Regular weekly or fortnightly inspections, logging each visit
- Sealing up of the letter box
- Drain down of the water system
- Removal of any combustible materials from both in and out of the property.
This cover may cost a little more, but it will provide full cover, giving you peace of mind and security, knowing if disaster strikes, you will be fully covered.
Your property is your investment, why risk losing everything for the sake of an extra few pounds.