Mike Goddard, chairman of Belvoir Lettings, said: “Many landlords leave matters such as buildings insurance to their letting agents to deal with. Under the new legislation most of these agents will not be allowed to sell or advise on insurance products as they have done in the past until they have been authorised by the Financial Services Authority (FSA).
“Indeed landlords will not be able to look to their letting agent to deal with such matters as insurance claims unless that agent is authorised by the FSA to do so.”
According to the FSA, between 3,000 and 4,000 UK businesses that currently sell insurance have not yet applied for authorisation.
The tough new laws mean that buy-to-let investors will no longer be able to arrange insurance for buildings through agents unless they are properly regulated.
“All Belvoir franchisees are now fully authorised to sell insurance products and deal with all insurance matters, having undergone a rigorous training programme in readiness for the insurance shake-up.
“However, I believe that many agents in the property lettings sector have been slow to recognise that the laws were about to change and they will not be able to handle insurance matters on behalf of their clients whether they are landlords or tenants wanting to make a claim.”
His concerns have been backed up by Eric Galbraith of the British Insurance Brokers Association who said: “Many businesses that sell insurance products as an add-on are just waking up to the fact that they are about to be regulated.”
Belvoir has stated: “We have been planning for this legislation for months and received our authorisation from the FSA last month.”
Under the new legislation most businesses will have to prove their fitness to trade.
Consumers who feel they have been badly treated will have the right to take their case to a powerful industry ombudsman.
