Renting and Insurance

Renting and Insurance

While insurance of a let property itself is fairly straightforward (the landlord has a responsibility to insure the building to the full replacement value, and would be pretty short-sighted not to want to do so in any case) insurance of the contents often causes some confusion. 

The landlord’s buildings insurance will cover damage to the building structure.  A good landlord-specific insurance will extend to cover the costs of temporarily re-housing the tenant in the event of the property becoming uninhabitable as a result of fire, flood or similar, although insurers are increasingly becoming reluctant to provide such cover in the case of flooding.  Tenancy Agreements should have a clause enabling the tenancy to be terminated early in the absence of such cover if the property becomes uninhabitable as a result of and Act of God (Force Majeure).  This will enable the parties to abandon the tenancy if circumstances make that the only realistic option.

The landlord’s insurance should also cover damage to his own contents within the property – carpets, white goods, etc., and it would be appropriate to claim against that cover in the event of, for instance, damage caused by a plumbing leak.   But what about damage caused by the tenant?  Most tenant damage is the result of an accident – the inevitable spilled wine, for example, rather than deliberate, but whether deliberate or accidental it is not appropriate that the landlord makes a claim and perhaps prejudices future premium rates, when he is not himself at fault.  For that reason Simply Let’s standard tenancy agreement requires tenants to maintain contents insurance cover against damage they might cause to the landlord’s property. 

What then about tenants’ own property?   While it’s clearly sensible for tenants to have insurance in place against damage caused them to their own belongings, and while Simply Let recommends tenants to do so, landlords and agents can’t insist on that.  Indeed there has recently been a case where a well known tenant referencing company and insurance provider has been taken to task by the Office of Fair Trading for encouraging letting agents to make such cover mandatory on tenants.  Most contents insurance will also cover loss of items outside the property – i-pod, phone or even bicycle, so it’s well worth considering. 

Whatever cover you are looking for, you do need to check the small print carefully to ensure it's what you really need or, if in doubt, arrange cover through a BIBA approved broker.  Although not financial advisers, Simply Let are authorised introducers for Homelet insurance for both landlords and tenants, and we will be pleased to assist you with any enquiries regarding that.