Home Insurance while Leasing - 14 Sep 2009 08:57
Homeowners are quick to take out home insurance and a separate policy to cover their home’s contents. What they don’t realise is that the risk of both the structure and contents of your home and household insurance policies increases when the home is leased out.
Whether this is a long-term lease or short-term, you must inform your insurer that tenants are living in the home. This will increase your premiums, but the increase will be less than the claim you will have to cover yourself when the insurer rejects it. Discuss the different options you have with your insurer and understand why your premiums will increase. However, the increase that you may experience by informing you insurance company of your tenants, may be very little.
In fact, some insurance companies state that leasing your home to three or less people does not even constitute letting or sub-letting. The owner must check the policy and contact his or her insurance company to be sure.
Your policy will change as well. For example, home insurance and household insurance policies state that if a home is leased, theft is only covered when such theft is accompanied by forced entry. This means that if the tenant walks off with your contents, you’re not covered and have no legal recourse to claim from your insurer.
The principle is that your tenants in all likelihood will not take as good care of your property as you would. This makes them a higher risk than you. But only marginally.
Homeowners are quick to take out home insurance and a separate policy to cover their home’s contents. What they don’t realise is that the risk of both the structure and contents of your home and household insurance policies increases when the home is leased out.
Whether this is a long-term lease or short-term, you must inform your insurer that tenants are living in the home. This will increase your premiums, but the increase will be less than the claim you will have to cover yourself when the insurer rejects it. Discuss the different options you have with your insurer and understand why your premiums will increase. However, the increase that you may experience by informing you insurance company of your tenants, may be very little.
In fact, some insurance companies state that leasing your home to three or less people does not even constitute letting or sub-letting. The owner must check the policy and contact his or her insurance company to be sure.
Your policy will change as well. For example, home insurance and household insurance policies state that if a home is leased, theft is only covered when such theft is accompanied by forced entry. This means that if the tenant walks off with your contents, you’re not covered and have no legal recourse to claim from your insurer.
The principle is that your tenants in all likelihood will not take as good care of your property as you would. This makes them a higher risk than you. But only marginally.