Landlord insurance pay-outs remain steady despite increasing claims

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Market analysis from Total Landlord Insurance reveals that the average proportion of a landlord insurance claim being paid out has fallen by -33 per cent since before the pandemic. 

The research shows that: –

• In 2019, landlords submitted insurance claims totalling £2.5 million to Total Landlord Insurance, with fire and water damage leading the way as the most expensive claims. Of this total, £2.1 million or 86 per cent was paid out by Total Landlord Insurance. 

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

• This means that the proportion of total claims paid was 53 per cent in 2021, a drop of -33 per cent compared to 2019.

• It’s interesting to note that the biggest decline in the proportion of claims paid between 2019 and 2021 was for those related to landlord liability insurance – insurance that covers the landlord in the event that a tenant is injured inside the property.  

• In 2019, landlords submitted liability claims of £44,400, 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 – this marks a decline of almost -60 per cent compared to 2019. 

• It’s a similar story with storm damage claims. In fact, Total Landlord Insurance doubled the amount it paid out for storm damage claims between 2019 and 2021, but the amount being claimed rose even more, from just under £338,000 to more than £1.5 million.

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