Landlords have been told they face another invisible threat beyond Coronavirus - it’s under-insurance, which is apparently rife in the private rental sector.
Data from RebuildCostASSESSMENT, a web-based insurer, reveals what it calls ”a massive shortfall in cover among rented homes and business properties.”
The insurance valuation provider estimates privately rented homes in Britain could be under-insured by a whopping £315 billion, while for UK commercial property, the underinsurance total is around £325 billion.
“What this means is buildings across the country are woefully under-protected in the event of any kind of damage” claims the firm’s director, James Scott-Brown
“I fear that in the current financial climate many property owners simply would not survive the consequences of underinsurance” he adds.
His firm estimates that overall some 79 per cent of property in the UK is under-insured, typically insured for an average of 69 per cent of their worth.
On the other side of the coin, some 14 per cent are apparently over-insured - and heftily so, at an average 121 per cent.
For the private rental sector, the company estimates the total under-insurance is some £315 billion.
“We’ve recently seen with the situation around business interruption cover that insurance contracts can lead to confusion. Under-insurance often leads to disputes with insurers” says Scott-Brown.
“Now is not the time for anyone to discover their insurance policy won’t pay out the amount they’re expecting. This is a UK wide problem and it can only be resolved by property owners realising the risk they’re running and then making sure their buildings are insured for the right amount.”
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