Landlords Advised, Don’t Make Small Claims on Insurance
Landlords advised don’t make small claims on insurance as an expert states that the loss of a no claims discount (NCD) could push up future premiums.
Director at let property insurance specialists Cover4LetProperty, Richard Burgess, says that one claim could force the annual cost of a landlord policy up by 20%.1
Landlords Advised, Don’t Make Small Claims on Insurance
He says: “Certainly with our policies, and with some of those offered by other providers too, a 20% NCD is automatically deducted from the cost of the annual premiums, so that landlords get cost-effective, affordable cover.
“Of course, should a successful claim be made on a policy, then at renewal, the new cost will not include the NCD, meaning the premiums will appear to increase quite dramatically.”
Burgess provides an example of a landlord who makes a claim for £200. As the policy has a £100 excess, the landlord receives £100 from the insurer if the claim is approved.
However, at renewal, the landlord will generally find that the cost of their policy has risen by about 20%, perhaps more. As the average annual premium stands at £208, the landlord will have to pay £249.60. Going forwards, they will also need to re-establish their NCD over the years
Burgess adds: “In the long run, 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 you contact your broker for advice, as that is what we are here for.”