Don’t let an insurance claim harm your long-term cash flow
A short while ago, I wrote a blog which outlined 7 essential tips to keep your buy-to-let maintenance costs down in winter. Pre-winter maintenance isn’t only essential to keep your tenants happy and your void periods rare and short, but also to protect your cash flow from costly insurance premium hikes.
In this article, you’ll learn about the most common winter insurance claims made by buy-to-let landlords – great information to help you prioritise your pre-winter maintenance programme.
Myth: My insurance will pay for essential repairs
If you don’t take the simple winter maintenance precautions we recommend, you could find yourself needing to claim your landlord insurance. That’s what it’s there for, right? Well, yes, that’s true, but every claim you make could lead to an increase in your premiums next year.
Therefore, while you might have your repair paid for this year, in the long term your cash flow could suffer because of higher insurance premiums. Insurance companies love putting premiums up, but not so much decreasing them.
What are buy-to-let landlords most likely to claim for in winter?
This winter is due to be a rough one – if you believe the weather forecasters. We’re set for months of storms, rain, snow, ice, and floods. All of which contribute to big problems for buy-to-let landlords. According to new research from Simple Landlords Insurance, the top reasons why buy-to-let landlords make claims during the winter are:
- Storm damage
- Burst pipes
- Boiler repairs
What are average claims made?
The research also tells us what the average claim amounts are. Remember that some insurance policies only finalise payments after the repair has been made. You may have to pay for at least part of the bill before you receive payment from the insurance company. Then there is your excess to pay.
Here is what the research says is the average claim amount:
- Fallen trees cost an average of £2,230
- Boiler repairs cost an average of £270
- Flooding repairs cost an average of £19,500
And a leak from a burst pipe? It could take as long as 100 days to repair, and cost the buy-to-let landlord an average £5,150. Imagine having to pay that out and then claim from your insurance company!
What is the advice of experts?
Andy Wynne-Jones, a Senior Underwriting Manager at Simple Landlords, commented on the research and said:
“With this winter predicted to be one of the coldest in many years, landlords need to take steps to get their properties and their insurance up to scratch. A well-maintained property is far more likely to be able to weather the winter weather.
“Inspections are key, and now is the time to make sure your roof is secure, boiler healthy, pipes insulated, gardens cleared and maintained to prevent trees or objects being picked up by high winds. Also, you need to ensure that tenants aren’t overloading sockets with Christmas lights or using any un-PAT-tested appliances.
“Now is also a great time to check your insurance policy to make sure everything is up to date, and you’re covered if you should need to make a winter claim.”
Make sure you use landlord insurance as a safety net
Insurance should cover you in emergencies – not for events that could have been avoided with a little care. Insurance companies don’t like careless landlords.
If you’ve got only limited financial reserves to pay for pre-winter maintenance, the information in this article should help you decide which issues are most likely to cause you to claim on your insurance. Make these the most pressing pre-winter maintenance issues to address. Top of our list is to service the heating boiler, followed by checking pipes and radiators, insulation, clearing gutters and checking the roof.
However, each property is unique. That’s why we recommend you inspect your property first thing. Then you’ll know for certain which is the most probable problem area for you.
Make sure your property is inspected regularly by professionals. Contact one of the Ezytrac team today on +44 01522 503 717, and discover why we’re one of the fastest-growing investment property managers in the UK, and why hundreds of buy-to-let landlords have turned to us for the support they need to manage their property and tenants effectively.
Yours in effortless property management,
Brett Alegre-Wood MARLA MNAEA