Potential coverage gaps are arising for landlords due to insufficient disclosure of property and tenant details to insurers. These deficiencies could prove extremely costly in the event of a claim. The problem of underinsurance remains severe, as properties may not be insured for their actual value, thus remaining exposed to significant risk.
Experts point out that many landlords have a low propensity for risk and a limited understanding of insurance obligations. This often leads to necessary information not being reported, or being reported inadequately. The consequences range from partial reductions in coverage to the complete rejection of claims, particularly in cases of complex damages or frequent tenant changes that have not been properly communicated.
Increasing pressure from regulation
With the tightening of supervisory regulations in the insurance sector, pressure is increasing on landlords to comply more precisely with their disclosure obligations. Insurance companies are increasingly required to carry out more thorough risk assessments, which directly impacts the requirements for the information provided. Incomplete data not only complicates accurate premium calculation but also poses significant risks to the validity of insurance cover.
It is emphasised that providing precise and comprehensive information is not only an obligation but also in the landlords' own best interest. Only in this way can it be ensured that full insurance cover applies in the event of a claim, and financial burdens are avoided. This includes the exact documentation of conversions, changes of use, or particular risk factors that may arise during the contract term.
Recommendations for landlords
- —Regular review of insurance policies for current relevance and adequacy of cover.
- —Careful and complete disclosure of all relevant property and tenant details upon contract commencement and with every change.
- —Obtaining a professional valuation of the property's value to ensure an adequate sum insured.
- —Communication with the insurer regarding any change in the risk situation, for example, structural alterations or longer periods of vacancy.
These preventative measures are crucial to close coverage gaps and ensure that landlords are comprehensively protected in the event of a loss. Adherence to these guidelines not only minimises financial risks but also contributes to long-term and stable property management.
