Assumptions are risky in landlord insurance.
They are risky for a landlord with one property.
They are even more dangerous for a landlord with five, ten, fifteen or more rental properties.
The larger the portfolio, the more moving parts there are. More properties. More tenants. More rebuild values. More rent. More void periods. More claims history. More policy conditions. More chances for something to be missed.
That is why portfolio landlords should not renew insurance on assumptions.
They need a proper review.
One assumption can become several problems
With a single property, an incorrect assumption may affect one address.
With a portfolio, that same assumption can be repeated across several properties.
For example, a landlord may assume that all tenant types have been correctly recorded. But one property may now be occupied differently. Another may have changed from a single let to an HMO. Another may be used under a different arrangement from the one originally disclosed.
The landlord may assume the sums insured are still accurate, but several properties may now be underinsured.
They may assume loss of rent cover is adequate, but rent levels may have increased across the portfolio.
They may assume unoccupied property conditions are understood, but one property may be empty for longer than expected.
In a portfolio, small details can become larger risks.
Portfolios change over time
A portfolio is not static.
Properties are bought and sold. Tenants move in and out. Rents change. Properties are refurbished. Works are carried out. Some properties become empty. Some are converted. Some may become HMOs. Some may have new management arrangements.
If insurance is simply renewed year after year, the policy may gradually move away from the landlord’s real position.
That can happen quietly.
The renewal arrives. The premium is checked. The landlord accepts it. The same process repeats the following year.
But behind the scenes, the portfolio may have changed.
The insurance needs to keep up.
Tenant type should never be guessed
Tenant type matters in landlord insurance.
A portfolio may include professional tenants, students, benefit-assisted tenants, company lets, supported living occupants, asylum seeker accommodation or other arrangements.
The issue is not whether one tenant type is automatically better or worse.
The issue is accuracy.
If a landlord assumes the broker or insurer already knows the current tenant type, but nobody has checked, the policy may be based on outdated information.
That can create problems later, especially if a claim involves tenant-related damage, occupancy, loss of rent or disclosure.
A proper portfolio review should check tenant type property by property.
Sums insured need regular attention
Buildings sums insured should not be treated as figures that are simply copied from one year to the next.
Rebuild costs can change. Labour and material costs can move. Properties may have been extended, converted or refurbished. Older properties, flats, HMOs and unusual construction may need particular care.
For portfolio landlords, the risk is multiplied.
One inaccurate rebuild figure is a concern.
Several inaccurate rebuild figures across a portfolio can become a major exposure.
If the sums insured are too low, the landlord may face underinsurance and a reduced claim settlement.
That is why portfolio landlords should not guess or assume.
Loss of rent cover should reflect real income
Rental income is often central to a portfolio landlord’s business.
It may support mortgages, maintenance, agents, contractors, tax liabilities and wider cash flow.
If a property cannot be let after an insured event, loss of rent cover may become very important.
But rent levels change. A property that generated one level of rent several years ago may now produce more. An HMO or higher-rent property may need particular attention. A portfolio landlord may have a much larger income stream at risk than the policy reflects.
Landlords should not assume loss of rent cover is adequate simply because it appears on the policy.
They should check the amount, the period and the circumstances in which it applies.
Unoccupied property conditions can easily be missed
In any portfolio, voids are likely.
One property may be between tenancies. Another may be undergoing repairs. Another may be empty during refurbishment. Another may be awaiting a new tenant, sale or licensing decision.
Insurance policies often contain conditions for unoccupied properties. These may include inspections, security measures, heating requirements, draining down water systems or notifying the insurer after a set period.
In a larger portfolio, it is easy for one empty property to be overlooked.
That can create problems if a claim arises.
Portfolio landlords need a clear process for tracking occupancy, voids and policy conditions.
Excesses and policy terms should be understood
A portfolio renewal may look competitive overall, but landlords should look beyond the total premium.
- What excesses apply?
- Are they the same across all properties?
- Do different excesses apply to escape of water, subsidence, malicious damage or accidental damage?
- Has a lower premium been achieved by increasing excesses?
- Are there endorsements or exclusions that affect certain properties?
A portfolio landlord should understand how the policy works in practice, not just what it costs.
Material facts matter more as portfolios grow
The more properties a landlord owns, the more information there is to disclose.
Previous claims, property condition issues, planned works, tenant changes, unoccupancy, unusual construction, licensing, previous insurance issues and known risks may all matter.
If material facts are missed, the landlord may only discover the consequences when a claim is made.
A proper broker should help landlords identify what needs to be disclosed.
But that requires questions.
It requires review.
It requires more than simply rolling last year’s renewal forward.
A cheap quote can hide weak assumptions
Portfolio landlords are right to look for competitive insurance.
But a cheap quote based on incomplete information is not a good result.
If the quote assumes the wrong tenant type, outdated sums insured, inadequate loss of rent cover or unrealistic unoccupancy conditions, the price may not reflect the real risk.
The lowest premium is not always the strongest outcome.
The goal should be the best available combination of price, cover, suitability and service.
That is what a proper portfolio review should test.
Why NetRent and Clear can help
NetRent has worked with landlords for 23 years. We understand rental property and the practical issues that portfolio landlords face.
We know that the bigger the portfolio, the more important it is to ask the right questions.
NetRent speaks to landlords directly, gathers relevant information and helps ensure the enquiry is properly considered before it is passed to Clear’s dedicated NetRent insurance team.
Clear Insurance Management then use their specialist broking expertise to seek suitable landlord insurance options.
Importantly, Clear do not simply roll landlord policies forward at renewal. They re-broke landlord insurance to help ensure landlords are getting the best available price and policy for their circumstances.
For portfolio landlords, that review process is essential.
Do not let assumptions become expensive
The danger with assumptions is that they often feel harmless until something goes wrong.
The landlord assumes the policy is correct.
The broker assumes nothing has changed.
The insurer assumes the information supplied is accurate.
The renewal is accepted.
Then a claim happens.
At that point, assumptions may be tested against the policy wording, the disclosure, the cover limits, the excesses and the facts.
That is not the time to discover that something was wrong.
Contact NetRent before you renew
If you own several rental properties, do not renew your landlord insurance on assumptions.
Send your renewal to NetRent before you commit.
Let us review what you have been offered. Let us ask the right portfolio-specific questions. Let us see whether Clear’s dedicated NetRent team can provide a competitive alternative that properly reflects your properties, tenants and wider circumstances.
You may save money. You may improve your cover. You may identify risks that have not been properly reviewed.
But most importantly, you will not be renewing blindly.
Call NetRent: 01352 721300
Email: insurance@netrent.co.uk
The bigger your portfolio, the more dangerous insurance assumptions become. Before you renew, send your landlord insurance renewal to NetRent.