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Big drop in insurance payouts relative to landlords’ claims

There’s been a drop in the proportion of landlord insurance claims actually paid out.

Data from Total Landlord Insurance suggests that the drop is as much as one third.

In 2019, landlords submitted insurance claims totalling £2.5m to Total Landlord Insurance, with fire and water damage the most expensive claims. Of this total, £2.1m or 86 per cent was paid out to landlord claimants.

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By 2021, however, the picture had significantly changed. The total sum of annual landlord insurance claims rose from £2.5m to £4m while actual insurance payouts remained steady at £2.1m. 

So, while the sum being paid out has remained largely consistent, there has been a sharp increase in the sums being claimed by landlords in the first place. 

The biggest decline in the proportion of claims paid between 2019 and 2021 was related to landlord liability insurance - cover for the landlord in the event that a tenant is injured inside the property.  

In 2019, landlords submitted liability claims of £44,400, some 68 per cent of which was paid out by the provider. In 2021, however, total liability claims rose to £125,500, of which just 8.6 per cent was actually paid.  It’s a similar story with storm damage claims. 

A spokeswoman for the insurer says: “The pandemic was an incredibly difficult time for everyone, not least landlords and tenants. The latter struggled with being locked within their homes while facing genuine concerns about health, income, and careers, while landlords had to grapple with an eviction ban even in the face of growing rent arrears and, in some cases, increasingly poor tenant conduct. 

“The result of which has perhaps been larger claims than they may have made otherwise in order to reset after the impact of the pandemic. However, with extensive measures in place to protect tenants during this period, many landlords have found that the reality of what can be recouped is some way below their expectation, albeit consistent with the pre-pandemic market.”

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    Good to hear insurers are refusing to pay out. The no win no fee Business in my experience is based on insurers being a soft touch and coughing up rather than investigating the facts and robustly defending. I have had claims were the tenant alleges he broke his ankle falling down the stairs yet when I investigated he went to hospital with a broken ankle four weeks before falling down the stairs. The tenant says he tripped over building materials injuring his face yet photographs show he had been hit on the back of the head. Witnesses mysteriously appearing months after the accident who happened to live round the corner from the claimant. I could go on. I get the impression that insurers did not care, simpler to pay out than defend and pass the cost back to the landlord.
    Jim Haliburton
    The HMOdaddy

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    Often insurance companies pay out because it's cheaper to do so than to fight the case in court , I agree that it's wrong but that's the way it is, and the scum no win no fee solicitors know this

     
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    I don’t get this someone is make fortune, are Insurance Policies worth having. We used to have great Policies in years gone by at least that’s what I thought. Those were replaced by so called specialist landlords
    policies, so now I am getting sceptical if 47% of the Claims were rejected, is there that many false claims or is it they find ways not to pay out, I know premiums increase every year while more terms & conditions are added. Most of mine are around £500. some more then add 12% tax on the premium £60, on each one, we are a right money tree and are the Policy’s worth having at all, if the worst happens will they have to pay or is there too many get out clauses. Didn’t see any real pay outs yet anyhow can’t remember exactly maybe £125k.

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    Going right back to 1987 I had a fire claim, General Accident (now been swallowed up by Aviva) they were brilliant, an interim payment of £10k within 7 days to kick start the repairs, and the claim fully paid out without any fuss, I think it does pay to insure with a ' proper' insurance company and not the cheapest , it would seem many now look for any reason not to pay out, thankfully I haven't needed to make a claim in a very long time, but one never knows what's just around that corner.

     
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    Exactly that I haven’t ever made a claim in 48 years but now concerned if something happened will they honour. I took out a Policy recently with another Company not to have too many with same Company, that was some bad experience, she kept me over half an hour question after question to the point it was touch and go whether I would terminate the call. Then sent me a Survey of 1-10 if I would recommend them to another Landlord, the answer was ‘one’ not good.
    I won’t be giving them any more business, it isn’t worth this crap with all this technology yet reverts back to the phone wasting our time plus takes ages to answer the stupid phone in the first place.

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    I don't do phone calls for that very reason, emails or texts only

     
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    Basically the insurer is claiming that the landlords are making excess claims in order to make good their losses during the pandemic.

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