Information for Landlords

What are the critical covers I should be considering in an insurance product?

Material Damage claims represent the largest number of claims paid by insurers with the wet peril of burst pipes, flood and storm representing 40% of all losses.

Trace & Access
Adequate Trace & Access cover for all types of pipes is an essential extension of cover as finding the internal or external leak is the key to factor in limiting your loss. Many of the cheaper premium contracts restrict or exclude the trace and access extension thereby limiting the total claim to the actual damage caused by the leak.

Malicious Damage by Tenant
20% of claims made by landlords are caused malicious damage, largely by tenant, with the average claim being around £7,000 mark. Many of our competitors exclude or restrict this cover.

Cannabis Farms
Cannabis Farm claims are normally paid under the malicious damage peril under our Commercial and Gold policies, and these are normally large claims. The average claim paid under Property Protector Scheme for this type of incident has been over £40,000.  For the avoidance of doubt, our Silver and Bronze products exclude these types of claims under the illegal activities exclusion.

Fire Claims
Fire claims represent about 18% of the claims paid so again adequate cover is essential but without the above extensions you can be left exposed to the more frequent incidents in your property.

Liability Covers
Adequate liability covers for both property owners and employer’s liability is essential but not compulsory. Many contracts offer employers liability as an optional extra.

This in our view is a risky approach, although the claim frequency is small these claims tend to be large as they normally result in personal injury to people. Remember any casual labour you use for cleaning, decorating or gardening your property are deemed to be your employees under the terms of the legislation.

Legionella - New Feature
Relatively new legislation for residential property owners, you now have a legal requirement to risk assess your properties for Legionella.   Whilst our most of our policies now extend to cover your liablity this is subject to you having complied with current Health & Safety Legislation.  You can find further information by using the link above on the menu bar.

Cannabis Farms the modern property owners risk

What is the Issue?

An increasing number of residential landlords are suffering damage to their properties, giving rise to potential claims, because their premises are being used by their tenant(s) and criminals to grow cannabis.

To help combat this worrying trend we've produced some information which may alert landlords to this growing menace.

The cultivation process of cannabis causes damage to the property due to:
  • fires starting due to the tenants bypassing the electricity meter
  • holes being made in walls to pass cables through
  • large quantity of water leakage from buckets and pipes
  • tenants starting fires to cover their tracks before police raids occur

How to spot if a property is being used for this purpose?

From information taken from our claim files, the following characteristics stand out which may suggest that a property could potentially be being used as a cannabis farm
  • Short term let of 3 or 6 month duration
  • Rent is paid in cash, sometimes either in full or for a significant period of the let
  • Landlords not vetting the tenant(s) sufficiently
  • Accepting a telephone number from the prospective tenant purporting to be last landlord as a reference
  • No background checks undertaken other than seeing passport of prospective tenant
  • Not getting bank details checked as rent is paid in cash
  • Promised references not being provided
  • Lack of visits to the property undertaken and, if done, external only or limited internal only
  • A pungent smell is produced which may be noticed through the walls of adjoining properties
  • Window blinds or curtains always drawn to prevent anyone seeing what's going on
  • Sub letting being allowed, with no control of sub tenant activities
  • No particular location issues, some very respectable premises/areas have been involved
  • No managing or letting agent employed to manage the property or vet the tenant details

Tips for landlords to prevent this happening?

You can take the following reasonable precautions

  • Do not accept payment of rent in cash, insist on payment via Bank
  • Be wary of short term lets without undertaking rigorous vetting of the prospective tenant
  • Ensure you inspect the premises regularly, with internal viewing if possible
  • Do not allow sub letting to occur
  • Employ a letting or managing agent to manage the tenant vetting process and provide an inspection service on your behalf to identify any misuse of the property early on or if you take on this responsibility make sure you carry out the work to the same standard as a managing agent