Keep your insurance valid, or massive consequences will occur!

January 26, 2012

Landlord Information

Thinking about renting out your property?

 Want to go on a long holiday and don’t want to leave your home empty?

 Sometimes leaving your home vacant may be a better idea!

You want to take a break, a year-long trip but you would also like to keep money coming in while you are away, so you let out your property.

To avoid agent costs you privately advertise your home and get the offer you want almost straight away. You think you are letting out to a nice, young and upmarket couple and go off on your break blissfully unaware of what will happen while you are away.

The holiday is half way through its course when you get an urgent call from your neighbour, you need to fly home immediately because there has been serious damage caused to your home by the tenants.

What you didn’t know is that your perfect tenants in fact like to party, a lot! They have destroyed your home and even personal belongings have been damaged.

The tenants have fled, of course, leaving you with a completely destroyed property. Obviously the first thing you do is contact your insurance company who sympathise with you, but when you tell them it was tenants who caused all the damage they tell you the bad news:

“Ah well I am afraid you are not covered for this as your policy is owner – occupied and not covered for tenants “

That was a big mistake made as now you have to use your own money including your savings to rebuild your property.

The insurance on your property automatically becomes void if you don’t notify them of any changes, it is so easy to phone your insurer and say you are now letting your property out to tenants.

"Ah well I am afraid you are not covered for this as your policy is owner - occupied and not covered for tenants "

You may also want to think about using a professional letting agency, they do take a cut of the monthly rent (around 10%) but you can pursue them if anything goes wrong.

If you do decide to privately advertise your property, make sure you have taken every step to protect yourself and find the right tenants. Never jump into the deep end, do your research and do background checks. Also have guarantors to sign for them to make sure you are not taken for a ride. Always get a deposit from the tenant, usually two to three months rent to cover any costs of damage that may occur.

Make sure you are covered for damaged property!

Remember, tell your mortgage company and insurer to keep your insurance valid!

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