Axa claims hundreds of thousands of landlords fail to take out the right insurance.
Around 25% have the wrong cover because they wrongly believe their buildings and home contents policy covers them for letting to tenants.
But, says the insurer, these policies offer no cover and any claim is likely to be rejected and the premiums lost.
Research by the company shows that accidental landlords are the main offenders as they let their former homes without taking professional advice about their legal obligations as property investors.
The study also found:
- 43% of accidental landlords do not realise they should have taken specialist landlord insurance
- 70% of landlords rent out a single letting property, and around 33% are 'accidental landlords?
- 28% thought landlord and residential policies were the same insurance product
- 11% bought standard home insurance as they considered specialist landlord insurance costs too much
The report also disclosed other blind spots in landlord expertise:
- Only 53% of landlords have a tenancy agreement
- Just 27% take an inventory when tenants check in and out
- 54% take deposits, but less than half are placed in a protection scheme as required by law
- 18% of landlords have no cash reserve for emergencies or void periods, while one in four has less than £1,000 set aside
- Axa picks up a claim against one in 20 landlord insurance policies each year
Darrell Sansom, of AXA Business Insurance said: “While many of these people may well have never intended to become landlords, the consequences of not sorting out the basic admin and putting some financial protection in place could leave them exposed.
“As an industry, insurers need to take some responsibility to ensure that the right questions are asked when customers are buying insurance. Consumers need to be made aware of the pitfalls of buying the wrong cover.
“Someone else living in your home can present a different insurance risk than the owner living there. Insurance is designed and priced to match these risks so it’s important to get the right policy.”
The article Accidental landlords are poor buy to let managers, says insurer appeared first on LandlordZONE.]]>
Article courtesy of LandlordZONE