REVIEW
GENERAL INSURANCE
Supporting landlords through the cost-of-living crisis Geoff Hall chairman, Berkeley Alexander
A
s I write, the National Residential Landlords Association (NRLA) is calling for a cost-of-living plan for the private rented sector as both landlords and their tenants face ever-growing costs. The report by NRLA points to recent official data showing that 69 per cent of private landlords are basic-rate taxpayers, highlighting why they’re not immune to the crisis. While we wait to see whether the government will implement NRLA’s suggestions, there’s an opportunity for advisors to step in and provide valuable advice and protection. First, for your professional landlords, consider a multi-property policy. These offer the ability to insure an entire portfolio under one policy. This may be a more cost-effective option, and reduces the administration burden for you and your client, as there is one renewal date, one annual review, and one claims line to call in the event of a claim. Second, my urgent advice to all landlords is to act quickly and secure rent guarantee policies while you still can. In the current crisis even the most reliable tenants could experience financial difficulties, and therefore the likelihood of rent arrears is higher than ever. Many landlords are also still struggling with the impact of arrears built up during the pandemic. Rent guarantee policies provide valuable protection to cover rental income should tenants be unable to pay. During the pandemic we saw a www.mortgageintroducer.com
number of providers withdraw from offering cover to new clients. Whilst the circumstances are very different now, have the conversation with your landlords and speak to your GI provider to secure policies for landlord clients sooner rather than later. FCA FOCUS ON MULTIOCCUPANCY BUILDINGS INSURANCE
The Financial Conduct Authority (FCA) has raised significant concerns over the way the market operates, and the increasing premiums seen, within the multi-occupancy buildings market (blocks of flats). Rapidly increasing insurance premiums, often due to construction/ cladding concerns, have resulted in significantly increased and sometimes unaffordable costs resting with the flat leaseholders. It’s an important topic. My view is that property managers are paid a service charge for activities related to the upkeep of buildings, and this includes the placement of insurance. Seeking alternatives when costs are rising seems a reasonable expectation rather than simply sticking with the current provider and passing the cost to the leaseholders. As advisors you’re well placed to assist property managers in doing the right thing. If you have a good relationship with your GI provider, reviewing the market could possibly help your clients to pay less and keep leaseholders happy. WHAT IS NON-STANDARD INSURANCE?
Non-standard has traditionally been a catch-all term for insurance needs that fall outside of standard household policies – risks like thatched roofs, listed buildings, underpinned properties, or policyholders with
previous criminal convictions. However, the way we live continues to change, and the nature of risk evolves. Our homes and the relationships we have to them look very different today than they did 50, 10, or even three years ago, and this has had an impact on what non-standard means today. Working from home, for example, is no longer unusual, but rather the norm for a large percentage of the population following the pandemic, and property risks that were previously considered non-standard are increasingly becoming standard, such as non-standard materials and alternative methods of construction. However, it’s not just the building that creates a non-standard insurance need. We receive weird and wonderful requests from time to time – for instance, we are increasingly seeing clients with highly expensive e-bikes that often still fall outside of standard parameters. These non-standard items are often things that the broker only becomes aware of in conversation. It reinforces the importance of regular contact with clients and getting to know them individually. Non-standard isn’t always just about the chocolate-box thatched listed property or the converted water mill – it’s not just about the structure, but about the individuals who live there, too. My advice is to be thorough in your conversations with clients. Whilst the “big data” three-question set style quotes currently available in the market have their place, they may not identify more non-standard requirements. You only find out about those sorts of things by talking to customers in more depth. If unsure, speak to you GI provider. They will be able to assist with bespoke quotes for those non-standard or difficult-to-place needs. M I
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