Benefits tenants and the effects on landlords insurance

20 years ago I worked in an insurance claims department .... We were trained to pick claims apart and through them out. Or negotiate them down. I remember one case where a TV actress had had a multiple shunt in a car she was a named driver, I recognised her name, did some research and realised she had put herself down as a student of drama, then we didn't get updated when she became employed... There are quite a few occupations basic insurers don't like, imagine if she had been a passenger in that car and the policy holder had caused an accident and the actress gets a facial injury ! Depending on where her career is at anyone time effects 'face value' lol sorry could not resist that.

Anyway I through the policy out, she had to pay for the claims, I vehicle repairs or write offs, the only thing we had to pay for was third party injuries.(European Directive), then we took her to court for our losses on those injuries....

So given insurers are tighter than ever and you never know what a tenant is doing income-wise, my tip is to read the policy, ask questions or get a broker to do it. If you have a policy that covers for HB claimants it will more than likely cover most risks.

If the insurer decides to change their criteria then it will effect you at renewal.

I found empty house insurance the most annoying, I bought a house empty six months and got stung. I know they would have checked. The next house I bought I I nagged the sale through to ensure the day I completed it had been empty under six months.

Insurers have one end game... Not to pay out or to get you for under insuring, the Insurance Ombudsman is helpful, but it's months of aggro.

My view is if something's cheap its not always a deal, it needs picking apart and I try apply what I learnt years ago to house buying, (especially legal packs), and reading policies. I have made some serious mistakes so I tend to use a small broker.

With regard to why tenants on HB benefits are higher risk..... Well they just are, but like young inexperienced drivers there are many exceptions and I am fortunate to have HB tenants who look after their properties. At the moment. I have had one who did not, cost me a bomb to fix, but that's the way it is sometimes. Unfortunately statistically they are higher risk. All my houses have wired back smoke alarms, heat detectors and the flats have them in communal hall ways. Han tenants tend to smoke.... Prevention is better than cure. I feel a bit snobby, but unfortunately HB tenants do tend to smoke... Fact, so that's why I spend a bit more.

Anyway there are various insurers who do cover at an average price and you can get multi-house policies too. But beware a deal! The devils in the detail xxx

Oops one material fact... The house is still empty until occupied, I pre-emptied that by securing a tenant prior to exchange (ie insuring time), it was occupied within 3 weeks.. Bit of real hard work.

Sorry about my usual typos! ....Throw ...Threw !

As one who has recently had a £50 000 claim for fire damage caused by an electrical fault I agree that all material facts should be disclosed and if that means updating on a regular basis then this needs to be done. This is my first claim in 30 years but it is still a worrying time and as stated can seriously affect the viability of your business. One area often ignored is getting a regular electrical check at least every 5 years. RCDs do not prevent fires but upgrading fuse boards and installing wired in and interconnected fire/heat alarms with back up batteries reduces the risk. Following a significant claim a detailed investigation does take place and if the material facts are not correct some companies will use it as a reason for reducing or not paying a claim.

I totally agree, I can't (brain fuzzy) remember why but I do one every 5 years and between tenants, it's money, but it's paid off. In 9 tenancies I've changed tenants twice so not too bad. Two properties held more than 5 years, so four checks and each time something needed sorting although small. Some DIY wiring and one due to something out of date, dunno but he is a good sparky and I'm happy with his advice. He does the PAT stuff too annually. One tenant brought their own gas range and I include that in the annual gas check.

I'm just happy as apparently a lot of house fires are caused by faulty electrical stuff, I am considering asking our tenants if we can have their stuff PAT tested.. Some brought FF and washers with them. So I can demonstrate I've done my best. Unfortunately I can't stop them smoking albeit on the doorstep as all smoke detectors are wired back !

Hi

I have a question if we are looking to rent but my partner is on a benefit would that affect the insurance that the landlord have to get for us? And do some insurance companies not allow someone on HB?

Many thanks

Hi Suki

The fact you will be renting as tenants in receipt of housing benefit does indeed result in increased insurance premiums for landlords and some insurance companies do indeed refuse to provide insurance on this basis.

It also creates many other risks for landlords, many of which no longer rent to tenants in receipt of benefits unless a suitable working homeowner is prepared to stand as guarantor.

I wish you luck.
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My HB tenant works 16 hours a week and also claims housing benefit. The insurance company asked if her earned income on its own would always be more than the annual rent as the premium would be lower. I can't be sure of that so I opted to pay the extra £100 per annum to be on the safe side. She's an excellent tenant so I am happy to do that but I can understand why others might not.

Reply to the comment left by "Mark Alexander" at "31/05/2016 - 07:21":

Even if the benefit wouldnt affect the house at all as it's for my partners business. Very frustrating as we got a house and the landlord changed her mind 1hour before us signing the agreements.