Property Clinic

Insurance company won't give me cover

Q Today, as a landlord, I was refused insurance on the contents of a property because my tenant is “not in full time employment or a stay at home parent looking after a child”.

I have been letting this apartment for some years and dealing with the same insurance broker for about 10 years and have never made a claim. Because my tenant is an international medical student, (aged 23, very reliable and of excellent character) the broker refused to renew my policy for contents insurance.

When I asked why, I was told that students and social welfare tenants cause more damage, resulting in more claims. (This despite accidental damage never being covered for rental properties.) I was also told that I would not be able to get contents insurance with other brokers either, unless my tenant was in full time employment or a stay at home parent looking after a child.

I replied that this was terrible discrimination against the unemployed, part-time workers, disabled people, pensioners and students and it could lead to landlords refusing to let to these people and increase homelessness etc.

I was told “We are regulated by the Central Bank.” Are the Government and Central Bank happy with this? I could understand if I had been told that the policy excess would be greater, but to refuse contents insurance on these grounds surely contravenes the Status Equality Act of 2000 and the UN Convention on Human Rights, as it could adversely affect a person’s right to a home.

A While the Equal Status Act 2000, as amended, specifies the grounds on which a person may not be subjected to discriminatory treatment in relation to the disposal of goods and the provision of services, for example, on the grounds of gender, age, disability, race and religion, it also identifies situations in which disparate treatment is acceptable.

Insurance companies are entitled to implement disparate charging or to refuse to grant cover where it can be demonstrated that such treatment is reasonable and justified by reference to the risks involved. The rationale behind such differential treatment must be based on actuarial or statistical data obtained from a reliable source, or other reasonable underwriting or commercial factors. In order to accurately assess the benefits expected to be paid, insurance companies must analyse information regarding the characteristics and nature of the policyholder. This information is then combined with the insurance providers historical experience of the claiming pattern of persons with similar characteristics to calculate the expected benefits payable. This figure becomes the determining factor in approving a premium.

In other words, a refusal to provide cover, although discriminatory, is a reflection of the insurers assessment of the risk involved. The insurer’s refusal to cover the contents of your property is justified in certain circumstances once the relevant equality laws are not breached and on the facts presented above, there does not appear to have been such a breach.

Suzanne Hannon is a trainee solicitor at WhitneyMoore