By SenseRisk, your 5*-rated, highly trusted, Bristol based insurance broker
7 Changes That Could Invalidate Your Landlord Insurance
Why Keeping Your Insurer Updated Matters
Many property owners and landlords arrange their insurance policy and then put it to one side until renewal. However, insurance is based on the information provided to the insurer at the time cover is arranged. If circumstances change and the insurer is not told, it could affect how a claim is handled and, in some cases, could leave you without the protection you expected.
Whether you own a single rental property or a larger portfolio, it is important to understand which changes need to be reported. A quick phone call or email to your broker or insurer can help ensure your cover remains appropriate and valid.
The Cost of Not Informing Your Insurer
The consequences of not disclosing changes can be significant. You may face:
- Reduced claim payments
- Additional policy conditions
- Increased excesses
- Cancellation of cover
- Claims being declined
Most insurers are not looking for reasons to avoid paying claims, but they do expect to be informed about changes that affect the risk, in their eyes, that they have agreed to insure.
Example: The Flying Freehold Hidden in the Title Deeds
Many owners have no idea their property includes a flying freehold because it was identified during conveyancing years ago and then forgotten.
Some insurers will happily accept them, others may ask additional questions.
Under the Insurance Act 2015, if you know something that could influence an insurer’s decision, it may need to be disclosed whether or not the proposal form specifically asks about it.
Example: A Property Was Declared as Terraced Instead of Detached
One property owner had insured their property as terraced when it was actually detached.
The annual premium was:
- Terraced: £373.80
- Detached: £533.36
Difference: £159.56
That means the premium should have been approximately 42.7% higher.
Under the Insurance Act 2015, many insurers would apply a proportionate remedy if this misrepresentation came to light after a claim.
For example:
- Fire damage claim: £50,000
- Premium paid: £373.80
- Premium that should have been paid: £533.36
Calculation:
£373.80 ÷ £533.36 = 70.1%
Claim paid:
£50,000 × 70.1% = £35,050
The landlord could therefore lose approximately:
£14,950
simply because the property was described incorrectly….
Not All Insurers Take the Same Approach
One insurer we particularly like in this area is Zurich.
Whilst many insurers would reduce a claim proportionately if incorrect information had been provided, Zurich has chosen to opt out of this particular remedy on certain landlord policies.
In practice, this means that where the error was neither deliberate nor reckless, Zurich may simply collect the additional premium that should have been paid and settle the claim in full.
In the example above, that could mean the difference between receiving £35,050 and £50,000.
We regularly see landlords shop around to save £30-£50 per year without appreciating how significant differences in policy wording can be when a large claim occurs.
Please note that the additional premium approach does not affect their right to apply the other remedies available under the Act for non-disclosure or misrepresentation.`
What Is a “Change in Circumstances”?
A change in circumstances is anything that alters the risk associated with your property. Some changes may seem minor but can affect the likelihood of damage, theft, liability claims, or repair costs.
If you are unsure whether a change is relevant, it is always better to ask your insurer or broker.
But My Insurer Didn’t Ask…
One of the most common misconceptions is that you only need to disclose information when specifically asked.
Under the Insurance Act 2015, you may need to disclose information that would influence an insurer’s decision, even if the proposal form does not contain a direct question about it.
-
The Property Becomes Unoccupied
One of the most common reasons for insurance problems is failing to notify insurers when a property becomes empty.
Many insurance policies contain restrictions if a property is left unoccupied for a certain period, often 30, 45, 60, or 90 days depending on the insurer and policy wording. Once that period is exceeded, cover may be reduced or subject to special conditions. If you have failed to tell your insurer, you may find your cover is restricted, subject to special conditions, or in some cases no longer valid.
Examples include:
- A tenant moves out and the property is awaiting new occupants
- A property is undergoing probate
- The building is being marketed for sale
- Renovation works require the property to be vacant
Failing to notify your insurer could result in a claim being declined if damage occurs while the property is empty.
Example: A vacant bedroom in an HMO triggered unoccupancy conditions
Many landlords assume that an HMO is either occupied or empty. Unfortunately, some insurers take a different view.
In one case, only one bedroom in a five-bedroom HMO became vacant. The insurer regarded that room as unoccupied and imposed additional conditions specifically relating to the empty part of the property.
These included:
- Weekly inspections
- Enhanced security requirements
- Removal of combustible materials
- Boarding or securing defective windows
- Restrictions on cover if the conditions were not complied with
Failure to meet these requirements would have allowed the insurer to refuse a claim.
Even more concerning, several insurers declined to quote altogether once the situation was disclosed.
The lesson? Never assume that a partially occupied property is viewed the same way as a fully occupied property.
-
Building Works, Renovations or Improvements
Many landlords are surprised to learn that improvements can affect insurance.
Insurers should be informed before work starts, including:
- Extensions and loft conversions
- Structural alterations such as removal of walls
- New roofing, kitchens or bathrooms
- Listed building restoration
- Installation of solar panels
Construction work can increase the risk of fire, theft, escape of water, and accidental damage. In some cases, your existing property insurance may not provide sufficient protection during the works.
If contractors are involved, additional cover such as contract works insurance may be needed.
Enhancements can increase the rebuilding cost of the property and may require the insured value to be adjusted. Underinsuring a property may result in receiving less than expected following a claim.
Example: The Solar Panels Nobody Told The Insurer About
A landlord installed solar panels to reduce energy costs.
Whilst many insurers are happy to insure properties with solar panels, some impose additional requirements and others may decline the risk altogether.
Never assume improvements don’t need to be disclosed simply because they increase the value of the property.
-
Changes in Occupancy
The type of tenant occupying a property is often an important underwriting factor.
Insurers should be told if there is a change from:
- Long-term tenants to short-term holiday lets
- Single households to shared accommodation
- Residential use to mixed residential and commercial use
- The tenancy agreement no longer being direct with the tenant
- The circumstances of the tenant – whether they are working, retired, on benefits, students or seeking asylum as some examples.
Different occupancy arrangements can present different levels of risk.
-
Security Changes
Security plays an important role in most insurance policies.
You should notify your insurer if:
- Alarm systems are removed or disconnected where declared.
- External doors or locks are changed so that they no longer comply with the minimum-security standards set out in your policy.
-
Property Damage
Insurers should be made aware if a property experiences events that materially increase risk, such as:
- Fire damage
- Flooding or major water leaks
- Subsidence
- Repeated vandalism and/or unauthorised entry
Even if you do not intend to make a claim, these incidents can affect the risk profile of the property and form part of your requirements to make a fair presentation under the Insurance Act.
-
Purchasing Additional Properties
For landlords with growing portfolios, new acquisitions should be discussed with insurers promptly.
-
Criminal Convictions, Insolvency or Financial Issues
Most insurers ask policyholders to disclose certain financial or legal matters.
Examples can include:https://senserisk.co.uk/risk-healthcheck/
- County Court Judgments
- Insolvency arrangements
- Bankruptcy
- Unspent criminal convictions
Failure to declare could affect how a claim is settled and, in some circumstances, could result in claims being declined
The biggest insurance disputes we see rarely involve fraud or deliberate wrongdoing.
They usually involve ordinary landlords making reasonable assumptions:
- “It’s only one vacant room.”
- “It’s only some solar panels.”
- “It’s only a renovation.”
- “It’s only a detached house instead of a terraced house.”
Unfortunately, insurers do not always view these changes in the same way.
If you are unsure whether something matters, ask the question. Five minutes on the phone could save thousands of pounds in a future claim.
Insurance Health Check
Landlord or Property Owners Insurance