A detailed report analysing 10 years of landlord insurance claims¹, released by Hamilton Fraser Total Landlord Insurance has shown that the top five claims are: escape of water, storm damage, break-ins, accidental damage and malicious damage.
These have been outlined below, in order of claim frequency:
Water Escape: accounting for 34% of total claims paid out between 2008 and 2018, this issue is defined as ‘when water has entered the property by the mains water supply and caused damage e.g. a burst pipe’.
There is a clear trend of these claims increasing in autumn/winter owing to frozen/burst pipes but these drop to their lowest in April.
Storm Damage: While the UK doesn’t tend to experience storms as frequently as other western countries, major (named) UK storms do significant damage to properties every year.
Hamilton Fraser’s research shows how maximum gust speeds closely correlate with storm claims, meaning landlords should pay attention of storm warnings and take preventative measures, particularly to roofs, which account for 51% of all storm damage, and fences.
Break-Ins: Attempted break-ins are very high in January but die down moving into summer, before picking up again from September.
Landlords should remind tenants around this time that properties are seen as more vulnerable when daylight hours are shorter, and opportunists are more likely to look for Christmas presents.
Accidental Damage: this usually includes things like a ball being kicked through the window, banging a nail through a water pipe when trying to hang a picture or as a result of tenants leaving taps running unintentionally.
Insurance providers offer different levels of cover which can affect the outcome of a potential claim.
Malicious Damage: described as the intentional physical damage to a property, malicious damage is not always covered on standard landlord policies.
Those that do often only protect against malicious damage caused by a third party, such as someone putting a brick through the window (not damage caused by the tenant). Therefore, remember to check your policy terms carefully.
The data also shows which claims incidents have been increasing and declining.
Interestingly, theft has been decreasing since 2011, which could show that landlords are perhaps being more thorough with inventories.
Claims for underground service, which incorporates pipes, cables and drains are also declining. Increasing trends are malicious damage, subsidence, fire and break-ins.
Eddie Hooker, CEO of Hamilton Fraser, says: “Property insurance is there to protect against those unexpected eventualities, but prevention is always better than cure. Carrying out this extensive research clearly shows that investment in property maintenance and taking simple steps to remind tenants about property security could prevent an issue arising in the first place and help keep your premiums low.”
¹ The report analysed 5,000 landlord insurance claims over a 10-year period