Can claiming on your landlord insurance be a false economy? In some cases the answer appears to be yes, particularly when making claims for small amounts, according to Cover4LetProperty.
The property insurance specialist is warning landlords that making a small claim may not be worthwhile, as the loss of any no claims discount (NCD) made by claiming could see the cost of their insurance cover increase by around 20%.
Richard Burgess, director at Cover4LetProperty, explained: “With our policies - and typically some of those offered by other landlord insurance providers too – a 20% NCD is automatically deducted from the cost of the annual premiums.
“If you make a successful claim on the policy, however, then at renewal, the new cost will not include the no claims discount – meaning the premiums will appear to increase quite dramatically.”
Burgess points out that over the past few years’, landlords have faced a whole raft of financial challenges, such as the reduction in mortgage tax relief and various legislative changes that have eaten in to their profits - meaning every penny counts.
He added: “When it comes to making small claims, however, 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 a landlord contacts their broker, as they will be able to advise on the next steps.”