Question

Insurance (England)

Landlords insurance and rent arrears

15 Jul 2017 | 3 comments

My DSS tenant is now in 2+ months of rent arrears. I have raised a money claim against her, and I am planning to start the eviction process very shortly however, my buildings insurance is due for renewal and one of the questions the insurers ask is ‘is the tenant in arrears?’. I obviously need to tell them that she is however, I just wondered if anyone knows how this will affect the insurance, or if it will make it really difficult to source landlords insurance? Many thanks

Answer

3 Comments

  1. guildy
    guildy on 15/07/2017 at 3:07 pm

    We’ve not heard of this on regular buildings insurance and fail to see how the question is relevant to buildings insurance.

    We’ve not researched but as far as we’re aware, a new Insurance Act is now in force and one of the things it does is not allow an insurance to use an irrelevant condition to refuse to pay out. This would be a good example of the tenant being in rent arrears is irrelevant to a leak or fire for example.

    It may be that you have some sort of rent protection built in? If so, maybe you can see about claiming for the current arrears? Our buildings insurance for example has an optional rent guarantee where you pay extra per annum and any tenants are covered for rent arrears (assuming they pass various credit checks and such before granting the tenancy).

    • sambam47180
      sambam47180 on 15/07/2017 at 5:04 pm

      Thanks for the quick response.

      There is no ‘rent protection’ built in, and it’s a renewal, so the question is listed in the ‘statement of facts’.

      The insurance company won’t actively ask me if there are arrears as they have just emailed me the renewal forms, it is for me to tell them that one of the facts in the statement of facts has changed.

      I have a feeling that they will use the arrears to increase the premium. Are they allowed to do this?

      Many thanks

      • guildy
        guildy on 15/07/2017 at 5:32 pm

        It all depends on their terms and conditions. You will need to speak to them.

        You could compare their renewal premium with the one we introduce available here

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