Hard lesson for landlords over student claims

PROSPECTIVE landlords who aim to let homes to students or DSS claimants may find they are unable to get full household and contents insurance on their properties.

At the same time, students are finding it increasingly difficult to obtain cheap contents cover in some big cities, in the wake of a sharp rise in claims over the past few years.

Britain's biggest insurance companies say they believe students and claimants are a bad risk. They also think the quality of many landlords' properties is sub-standard and liable to heavy claims. Even where insurance may be available, companies impose exclusions to their policies, or significantly increase the premiums.

General Accident said DSS claimants or students, particularly in short-term lets, were 'not actively sought'.

'Our previous experience is that with short-term lets there is often considerable damage to property,' a spokesman explained. 'For longer-term lets, the kind of contents cover provided would relate only to theft involving violent and forcible entry.'

Where multiple occupancy of a flat or building is concerned, the company is even less likely to consider providing buildings cover. Should a landlord be able to get insurance, it would have to be commercial rather than private, which is often more expensive.

Similar responses came from other insurers, including Commercial Union, Norwich Union and Eagle Star. While most companies are loath to insure short-term tenants, one that remains in the market for students is Endsleigh.

Neville Statham, technical manager at Endsleigh, said: 'For landlords, we are prepared to give short-term cover as long as they offer their property through a college's student accommodation office. But it must have been inspected and approved by the office beforehand, and we need to see evidence of that.'

Until two years ago, Endsleigh offered students cover for their possessions. Claims experience in recent years has forced the company to change its policy. Mr Statham said: 'In Newcastle, there were cases where burglars would break into every empty home in the street and carry away all the valuables while students were on holiday.'

Endsleigh still offers cover, albeit far less generous than before. In 35 postal districts of Leeds, Manchester, Liverpool and Newcastle, students can only get the company's CityPlan policies. For pounds 99 a year, this pays a maximum of pounds 1,000, of which no individual item may cost more than pounds 150, and no more than pounds 300 may be claimed for electrical goods, jewellery or valuables. Claims of more than pounds 100 for records, cassettes or audio equipment are also not allowed.

In contrast, the premium is pounds 35 for a person in Cheltenham taking out cover of pounds 2,000 with Endsleigh. Mr Statham said: 'The student community did bring this down on itself. There was no attempt to reduce loss and protect possessions. The result is either high insurance or nothing.'