The average proportion of a landlord insurance claim being paid out has dropped by a third since before the pandemic, fresh market analysis from Total Landlord Insurance has revealed.

In 2019, landlords submitted insurance claims totalling £2.5m to Total Landlord Insurance, with fire and water damage leading the way as the most expensive claims. Of this total, £2.1m or 86% was paid out by the insurance provider.

By 2021, however, the picture had significantly changed. The total sum of annual landlord insurance claims rose from £2.5m to £4m, while actual insurance payouts remained steady at £2.1m.

This means that the proportion of total claims paid was 53% in 2021, a drop of 33% compared to 2019.

So, while the sum being paid out has remained largely consistent, there has been a sharp increase in the sums being claimed by landlords in the first place. Indeed, the data shows clearly that Total Landlord Insurance’s payouts remained steady while the total claim sum nearly doubled.

Interestingly, the largest decline in the proportion of claims paid between 2019 and 2021 was for those related to landlord liability insurance – insurance that covers the landlord in the event that a tenant is injured inside the property.

In 2019, landlords submitted liability claims of £44,400, 68% of which was paid out by the provider. In 2021, however, total liability claims rose to £125,500, of which just 8.6% was actually paid – this marks a decline of almost 60% compared to 2019.

It is a similar story with storm damage claims. In fact, Total Landlord Insurance doubled the amount it paid out for storm damage claims between 2019 and 2021, but the amount being claimed rose even more, from just under £338,000 to more than £1.5m.

Melissa Choules, lead claims technician at Total Landlord Insurance, commented: “The pandemic was an incredibly difficult time for everyone, not least landlords and tenants. The latter struggled with being locked within their homes while facing genuine concerns about health, income, and careers, while landlords had to grapple with an eviction ban even in the face of growing rent arrears and, in some cases, increasingly poor tenant conduct.

“The result of which has perhaps been larger claims than they may have made otherwise in order to reset after the impact of the pandemic. However, with extensive measures in place to protect tenants during this period, many landlords have found that the reality of what can be recouped is some way below their expectation, albeit consistent with the pre-pandemic market.”