Are your tenants covered by your landlord insurance?

September 24, 2012

Landlords Insurance

Many landlords may wish to think that their insurance policy automatically covers their tenants for a range of specified risks.

In practice, things may not always be quite that simple.

Some landlords are unaware that some insurance providers have policies containing special exclusion clauses relating to certain categories of tenant.  Examples of such categories might include some types of immigrants, DSS housing benefit recipients and students.

The reason for this is typically simple if sometimes controversial.  Some providers see tenants in these categories to be particularly high risk and therefore exclude them. That may mean that you are not covered by the provisions in the policy relating to things such as malicious damage by tenants or property theft etc.

As a general rule, having tenants in your property that are not covered by your insurance is a bad idea.  The risks are hopefully self-evident and could end up leaving you facing very substantial costs without the support of an insurance policy behind you.

This is a matter worth thinking about and possibly considering carefully.  Even if you currently are not letting to these categories of tenant, you may wish to do so and at perhaps relatively short notice.  That might not be the time to suddenly have the unwanted complexity of an insurance issue to deal with.

Some insurance providers, such as ourselves at CIA Insurance, offer what is called all-tenant cover.  Getting a buy to let insurance quote with this provision in it might be a sensible step to take if you would like to have the maximum flexibility in your business plan.

As an aside, remember that tenant cover typically does not include things relating to tenants themselves in areas such as personal accidents or loss/theft/destruction of their own property.  It might be prudent to make sure that you highlight this clearly in your tenancy agreement with them and perhaps recommend that they look to their own insurance cover as a matter of some urgency.

This might eliminate any ambiguity or cause for confusion, something that can easily happen if, for example, your tenants are renting for the first time.  It’s worth the little extra effort involved.

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