Will my normal home insurance policy cover my let property?

Posted: 4th Jun 2014

No. This is arguably one of the most important aspects to grasp about being a landlord.

If you are using property for the generation of any sort of rental i ncome, however you may think about yourself, the insurance industry and other various legal bodies will consider you to be a landlord.

Typical owner-occupier buildings and contents insurance will never be valid for a property being used for letting purposes. In other words, you must have policies that recognise the nature of the use of your property and those policies are generically referred to as landlords’ insurance.

There are two situations which occasionally confuse some of what might be termed informal landlords into thinking otherwise:

  • where you are only letting your property for a few weeks each year – for example during the holiday season;
  • in circumstances where you remain permanently resident in the property but are letting a part of it out to someone else.

You should note that typically, these types of circumstances will make no difference at all to your insurance provider. You will still be earning rental income from your property and that will invalidate any existing owner-occupier cover you have in place.

This isn’t just a question of designation.

If you have an owner-occupier mortgage, you should seek the permission of your mortgage lender before starting to use your property for rental income generation. Once you have obtained their permission, they will continue to demand that you maintain full insurance cover for the buildings in order to protect their interests.

If you fail to do so you may be in breach of your mortgage agreement and to avoid that you will need to take out landlords’ insurance.