Landlords have been warned not to under-insure their properties, after one landlord was left out of pocket to the tune of £100,000.
The landlord had presented his insurers, Total Landlord Insurance, with a bill for nearly £400,000 after a fire broke out in a block of flats, caused by a tenant cleaning car parts with petrol in the kitchen.
Only when he submitted his claim did the landlord realise he had under-insured his property over a number of 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 who have taken out policies some time ago are being 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 two years, almost 20% of all fire claims settled by Total Landlord Insurance were the result of kitchen fires.
Of these, 10% were due to tobacco smoking, 5% caused by burning candles and 5% by electrical faults.
Hooker said: “Properties in multiple occupation are among 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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