Property Investment Insurance Claims Increased During The Pandemic, Study Reveals

The number of claims that landlords and property investors applied for increased during the Covid-19 pandemic lockdowns. Malicious damage insurance claims, in particular, rose by half. This is according to a market research study made by the Total Landlord Insurance. 

Study Outlines Types of Property Investment Insurance Claims Applied For

The study reported that between 2019  and 2021, that the number of claims that landlords and property investors applied for increased from 536 to 603. Insurance claims lodged ranged from liability insurance claims, break-ins, malicious damage, underground services, to storm damage claims. 

During this time, the fastest growing reason for an investment property insurance claim was the storm damage claim. It increased by 93% during the pandemic. Storm damage claims went from 70 in 2019 all the way up to 135 in 2021.

Malicious damage, on the other hand, also increased by 50% during the pandemic (between 2019 to 2021). 

Property Investors

Covid Lockdowns Worsened Landlord Concerns And Increased Insurance Claims Applied For By Property Investors

The landlords couldn’t access their properties during the pandemic like they normally would. They could check the state of their properties and oversee repairs needed during the lockdowns. 

This inability to do not only increased the number of claims, but also aggravated the damages. This, in turn increase the sizes of the claims. The study notes that between 2019 and 2021, the average claim size increased 29%, from £5,773 to £7,429.

When broken down into the different types, the increase is staggering. Underground services claims increased by 95%. Break-in claims increased by 101%. Storm damage claims rose to up to 140%. But those numbers aren’t even the biggest increase: Liability insurance claims increased by 270%!

Average Size Of Property Investment Insurance Claims Has Increased As Well

Average liability claims jumped from an estimated £1,306 to £4,827! Liability insurance is protection that the landlord gets against any harm or injury that happens to their tenants or the occupants while inside of their properties. 

Which makes us wonder: what are those tenants doing in there? Because you have to remember that these liability insurance claims were for damages that happened during the pandemic. 

Stress + Resentment Over Job Loss, Inactivity May Be The Cause

Melissa Choules, Lead Claims Specialist at Total Landlord Insurance, notes that the results of the study suggest that all the pent-up energy and emotions may have been directed at the property. 

This may be one of the reasons for the increase in claims, especially for malicious damage. Arguable but worth looking into.

Property Investment Insurance

Lack Of Access During Lockdowns Worsened Damage Caused To Properties

Another reason stated for the increase in the number and the size of claims is lack of access. The inability of landlords and property investors to gain access during the lockdowns meant that damages are not immediately fixed. 

These damages worsened due to the forced neglect. Ultimately, this leads to increase in the cost of repairs and thus, insurance claim sizes. 

This situation was a common occurrence during the pandemic, particularly in many second hand residential properties. It’s why in the post-pandemic property market, off-plan and new-build are very good investment options. 

Investing in off-plan and new build property is a great strategy if you’re looking to build or add to your property investment portfolio. 

Many professionals and families appreciate renting close to where they work, shop, study, and relax. Investing in property with solid fundamentals and in areas that are in regeneration is even better. And a big benefit to new build property is the insurance coverage for landlords and property investors like you

If you’re interested to know more about news around the industry, book a chat or give us a call on today on 02079236100. We’ll introduce you to our One Great Property Idea and help you build a plan and strategy for investing into off-plan and new build properties. You’ll also learn why investing in regeneration areas is our secret sauce for success.

Brett Alegre-wood
September 2, 2022

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