Owning rental property can be a smart investment, but it also comes with responsibilities and risks. One of the most frustrating situations a residential landlord can face is having an insurance claim denied. Unfortunately, claim rejections are more common than you might think. According to the Financial Ombudsman Service (FOS), landlord and property insurance complaints are among the most frequently disputed cases. In many instances, claims are rejected due to issues that could have been avoided with a bit more planning and attention to detail.
Here are the top five reasons landlord claims are denied – and how you can avoid falling into the same traps.
Lack of Regular Property Maintenance
One of the most common reasons insurance claims are rejected is because of poor or irregular maintenance. Insurers expect landlords to take reasonable steps to keep their properties in good condition. If damage is found to be the result of neglect or long-term wear and tear, the insurer may reject the claim.
For example, a leaking roof left unrepaired for months causes significant interior damage. The insurer determines that the damage was preventable and refuses to pay out.
How to Avoid It:
- Schedule regular inspections of your rental property (ideally every 6-12 months).
- Keep a maintenance log with details of any repairs or checks carried out.
- Address minor issues before they turn into major problems.
Incorrect or Incomplete Information on the Policy
Providing inaccurate or outdated information when setting up your policy can be grounds for denial. This includes failing to declare that a property is let out, or not disclosing important factors like the number of tenants or whether the property is furnished.
How to Avoid It:
- Be completely transparent when purchasing your policy.
- Notify your insurer immediately of any changes to the occupancy, use, or condition of the property.
- Review your policy annually to ensure all details are up to date.
Unoccupied Property at the Time of Damage
Most standard landlord insurance policies have strict rules about how long a property can remain unoccupied before coverage is affected. If damage occurs while the property has been empty for longer than allowed, your claim may be denied.
How to Avoid It:
- Understand your policy’s terms regarding unoccupied properties.
- If your property will be vacant for an extended period, inform your insurer and ask about additional coverage.
- Consider installing a leak detection system or arranging for someone to regularly check the property.
Failure to Meet Security Requirements
Insurance policies usually include specific requirements regarding locks, alarms, or other security features. If these aren’t in place or maintained, any claim involving theft or vandalism could be rejected.
How to Avoid It:
- Review your policy’s security requirements carefully.
- Ensure all specified measures (e.g., window locks, alarm systems) are installed and functioning.
- Keep receipts and records of any upgrades or installations.
Wear & Tear vs Insurable Damage
General wear and tear is not covered by landlord insurance. Insurers make a clear distinction between sudden, unexpected events (which are covered) and gradual deterioration (which is not).
For example, if a tenant complains of a leaking tap that eventually causes water damage to the flooring. The claim is denied as the damage developed over time and was not reported or repaired promptly.
How to Avoid It:
- Educate tenants to report maintenance issues immediately.
- Differentiate between damage and deterioration when submitting claims.
- Take photos and keep documentation to show when and how the damage occurred.
Insurance is designed to protect landlords from unexpected losses, but only when the policy conditions are met. By staying informed, proactive, and organised, landlords can dramatically reduce the risk of rejected claims.
Need help reviewing your landlord insurance or ensuring you’re properly covered? Get in touch with the experts at The Bateman Group today.
