Potential Perils and Threats Looming in the Residential Property Insurance Industry
UK Rental Market Sees Increase in Insurance Claims for Blocks of Flats
In the ever-evolving UK property market, insurance claims for blocks of flats have become a growing concern for landlords and insurers alike. According to recent data, the most common insurance claims for blocks of flats in 2024 typically involve building and structural issues such as subsidence and damage caused by foundation movement [3].
Subsidence, a frequent cause of claims, stems from various sources including tree roots, poor foundations, drainage problems, and clay soil conditions. The average settlement per subsidence claim is approximately £10,000, with severe cases costing much more [3].
The surge in renters priced out of the buyers' market is creating demand for rental properties, boosting the rental market. This increased demand has led to the Renters Rights Bill proposing that three weeks' rent should be the deposit against pet damage. However, this raises questions for insurers regarding proof of pet damage and estimated repair costs [1].
In an effort to alleviate this issue, InsureTech firm Canopy has raised £1.3 million to disrupt the rental deposit market. Canopy claims to help free up rental deposits for the benefit of the UK economy. The problem for insurers is proving that the pet did the damage, not the tenant or their friends, and estimating repair costs [2].
Accidental Damage, which includes incidents such as broken windows, maintenance-related mishaps, and water ingress, accounts for 30% of claims. Storm Damage makes up 15% of total claims, and the average cost per claim has fallen by nearly 48%, while Escape of Water accounts for 42% of all reported claims in 2024 [2]. The average cost per claim for Escape of Water has reduced by nearly 45% [2].
For more detailed insights into the most frequent insurance claims for blocks of flats in 2024, you can find full information on claims costs, types of claims, and preventative measures at https://www.lansdowninsurance.com/blog/top-3-most-common-blocks-of-flats-insurance-claims-in-2024/.
Darren Bee, Associate Director at Lansdown Insurance Brokers, commented on key insights into the most frequent insurance claims for blocks of flats in 2024. However, Lansdown's specific analysis for 2024 claims was not retrieved in the available search results [4]. For direct findings from Lansdown's analysis, it may be necessary to consult their publications or reports.
- Based on the current trends in the UK rental market, investors may need to consider the potential impact of increased insurance claims on their property insurance premiums, particularly for blocks of flats, given the rising number of claims due to events like subsidence and pet damage.
- As concerns about proof of pet damage and estimated repair costs grow among insurers, it is essential for finance professionals who are involved in investing in real-estate to have a clear understanding of preventative measures to reduce these risks and minimize claims.
- With the numerous insurance claims, such as accidental damage, storm damage, and escape of water, it is crucial forproperty owners and landlords to take a closer look at their insurance coverage for blocks of flats,Considering that claims costs and types have evolved significantly in 2024, as indicated by the analysis conducted by Lansdown Insurance Brokers.
