Insurance rates 'will probably rise'

12 March 2010

Written by Gavin Elley

Buy to let owners and tenants may need to set aside extra funds to cover insurance on properties, after it was claimed that premiums could rise.

Steve Foulsham, technical services manager for the British Insurance Brokers' Association, said that rates will probably go up because of the large number of claims over the winter months.

Landlords may have had to claim for burst pipes, after the cold weather saw many systems unable to cope.

Added to this is the fact that such claims are often more costly than they used to be, because many people have more expensive household items now.

"Insurers will be looking at their bottom line in terms of underwriting performance and with the sheer number and cost of these claims we could well see rates rising," Mr Foulsham explained.

According to the Association of British Insurers, homes and business insurance claims for property damage totalled £255 million in December 2009 and January 2010.

The amount of claims was double its normal rate for that time of year and most of the damage had been caused by snow, the association revealed.

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