Homeowners insurance claims rise as renters miss payments

Rent insurance claims have skyrocketed while tenants are in arrearsnew figures showed.

Claims rose 46% last month compared to the previous six months, according to figures from Alan Boswell Group, a supplier. Demand from homeowners had also increased by 60% over the same period.

Policies cost as little as £160 a year and cover landlords for loss of income and legal costs if they have to be evicted.

Andrew Hagger of MoneyComms, an analyst, said rental guarantee insurance would become more expensive for owners in the near future.

He said: “It is inevitable that an increase in claims will lead to an increase in premiums, especially as this situation will worsen as the cost of borrowing and the cost of living crisis continue to bite.

Insurers could also tighten their acceptance criteria for those applying for such coverage in the future.

Heath Alexander-Bew of the Alan Boswell Group said landlords were buying policies covering at least 18 months’ rent. He said: “Evictions take longer and there can often be a lot of vacant time while repair work is completed.”

Chris Norris, of the National Residential Landlord Association, a trade body, said it’s common for landlords who use letting agents to have such insurance policies – as the product is often included in the package.

He said: ‘The one thing landlords need to be very careful about with rent insurance products is that some of them are very restrictive on which tenant you can take on. They will insist on listing the tenant and sometimes have stricter criteria than the landlord might normally use.

Mr Norris said there were fears that vulnerable tenants and benefit recipients could be left out.

But for some landlords struggling with rent arrears, insurance still isn’t worth the expense.

Megan Smith, a 52-year-old landlord from Hertfordshire with 16 properties, has a number of rent arrears.

Ms Smith, who asked for her name to be changed, said she did not think rent insurance was cost-effective.

She said: “I usually get the money, three months later or whatever, when whoever is having trouble has gotten back on track.”

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