Renters (Reform) Bill (Eighth sitting)

Debate between Mike Amesbury and Craig Tracey

Committee stage
Thursday 23rd November 2023 Public Bill Committees

[Mike Amesbury (Weaver Vale) (Lab)]

Would the market respond to that? Is there an opportunity there?

[Craig Tracey]

Yes, there is, but there are still some problems, which I will explain now. Even if the market does respond, that cover is not available now, so it might not be available from day one. It might respond in future—the hon. Member is right—but that leads me on to insurable interest. Usually, someone insures only something that they own. If they insure somebody else’s property, they have the potential to make a claim on it and that money goes to them as the policyholder, and they are not obliged to pass it on to the property owner. For that reason most insurance contracts are tied around an insurable interest, which is an important point because what we are trying to do here is cover the landlord’s property.

There could be an instance where a policy is taken out, a dog chews through a cable or something like that, and the tenant claims for it, but does not pass the money on. I will come to how we get round that. Also, Shelter mentioned that—there was a conversation over the weekend with the British Insurance Brokers’ Association —when financial shocks come, insurance products are normally one of the first things to be cancelled. So there is a worry for the landlord that the tenant might take the cover out at the start of the term, but there is nothing to say that that continues through the whole life of the tenancy and that the payments are made and maintained.

The third point is about the ability of a tenant to obtain cover, anyway. There are various barriers that might leave people unable to take out an insurance policy. There might be previous convictions or a previous claims history, or it might just down to the postcode and the particular area. Often such barriers would exclude some of the most vulnerable people who would benefit most from the cover.

The simplest solution is for the landlords to take responsibility for the policy covering their buildings insurance. It is their cover and they can make sure that the correct cover is in place and that there is not an onerous excess on the policy that might exclude payments coming out. They can make sure the cover is in force.