Loss of rent insurance due to flood?

by Readers Question

3 years ago

Loss of rent insurance due to flood?

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Loss of rent insurance due to flood?

I let my property in 2007 for £700 pcm (mates rates). Loss of rent insurance due to flood

I didn’t bother to update the rental agreement and only raised rent by £75 in 7 years.

When my tenant left due to a flood three months ago the loss of rent insurance kicked in at £700 pcm, even though I eventually rented for £995 which is the true market rental value.

My question is; what is the insurance company liable to pay, is it the £995 market rental value or what my mate was paying at 2007 mates rates?

Thanks

Mike

Comments

Mark Alexander

3 years ago

Hi Mike

This seems like a question for our resident Property118 insurance expert Jason McClean so I've given him the heads up to take a look at this thread.
.

DC

3 years ago

You should be entitled to claim exactly what you can prove you have lost, so provide your insurer with rent statements or your bank statements that show you have lost £995pcm.
By the way, this applies in a similar way if HMRC come knocking to see if you really were charging mates rates in 2007, or the market value but not disclosing the difference!
If your insurer won't play ball then you know what to do - change insurers!
Good luck.

Jason McClean

3 years ago

Hi Mike

This should be fairly straightforward. Whatever you were charging for rent is what you should be able to claim back per month, subject to any T&Cs under the policy. You cannot claim back more than you were charging. I expect whatever is in your AST, backed up by your bank receipts, will be the figure the insurer will pay out.

Don't try to fool them or inflate it because if they find out, and invariably they will as they have very sophisticated fraud departments, then they will cancel your insurance and you'll get nothing. And then it will be a costly nightmare to get any kind of insurance in the future because you will have to declare previously refused for insurance.

I hope this helps.

Best

Jason

Sally T

3 years ago

Sounds to me like your tenant moved out due to flood which would be when claim started, then you agreed a new tenancy for when property was habitable again.
Did the people paying £995 actually move in before flood? If not then it would be the £775 you'd been receiving (if you can prove increase by bank statements.
If you choose to offer mates rates to the tenant why should the insurance company be made to pay more ?

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