"Owner Occupied" vs. "Landlord" Insurance

[Triafro]

I am a first time landlord and have recently come a cropper with my insurance. I purchased a house in January 2010 with a mortgage and as usual my mortgage provider requires me to have buildings insurance. In February 2010 I had 3 professional working tenants move in to help pay the mortgage and I still live there as well (as a live-in landlord).

It recently came to my attention (and that of my insurance company) that having more than 2 paying tenants resident in the house invalidates my buildings insurance. So I looked for "Landlords" insurance and got a reasonable quote at £210 pa. I rang up the website, cia-landlords.co.uk, to check that the policy would be valid in my circumstances and they told me that I would require an "Owner occupied" insurance policy, the cheapest of which was £429!

So my questions are:
1. Does my situation require "Owner occupied" insurance cover? Or is there such a thing as "Live-in landlord" cover? Or should I just be covered by regular "Landlord" insurance despite the fact I live there?

2. Why does the premium nearly double if the landlord lives there? It is completely counter-intuitive - in my experience tenants are far more careful with a property if the landlord lives there too!

Swift/any answers appreciated, my current insurance policy will be cancelled on Monday regardless so I have to find a solution one way or another.

Thanks
Matt

[Triafro]

P.S. I have checked and the mortgage provider is quite happy for me to have "lodgers", even 3 of them.
Matt

[mind the gap]

2. Why does the premium nearly double if the landlord lives there? It is completely counter-intuitive - in my experience tenants are far more careful with a property if the landlord lives there too!



Are you sure they are talking about an equivalent policy - ie, just buildings?

I agree it does not make sense, although having said that, our building insurance for our student rental property is lower than for our own house (roughly similar re-build cost) (although not half the cost).

Probably worth checking other insurers?

We found Endsleigh for the rental property and Aviva for our own house, the best.

[paulb67]

Hi Triafo

It would be better for you to approach a local broker and get them to help.

Some insurers will be happy to give you a standard House Buildings insurance policy (owner occupier), some won't but will offer you a Landlord Building Insurance.

It's unlikely that you will notice a significant difference in the price.

I'd prefer a Landlords policy. The main difference is that you should be covered for loss of rent, following damage at the property (not the same as legal expenses and rent protection which covers loss of rent if the tenant refuses to pay).

Try this link to find someone near to you.

www.biba.org.uk/ConsumerHome.aspx

Good Luck.

[specialist]

Hi Matt

I am very surprised that your premium has doubled, but you can try this link to obtain an indipendent quotation. They have been good for me.

http://www.deliteinsurance.co.uk/property_quotation.php



I am a first time landlord and have recently come a cropper with my insurance. I purchased a house in January 2010 with a mortgage and as usual my mortgage provider requires me to have buildings insurance. In February 2010 I had 3 professional working tenants move in to help pay the mortgage and I still live there as well (as a live-in landlord).

It recently came to my attention (and that of my insurance company) that having more than 2 paying tenants resident in the house invalidates my buildings insurance. So I looked for "Landlords" insurance and got a reasonable quote at £210 pa. I rang up the website, cia-landlords.co.uk, to check that the policy would be valid in my circumstances and they told me that I would require an "Owner occupied" insurance policy, the cheapest of which was £429!

So my questions are:
1. Does my situation require "Owner occupied" insurance cover? Or is there such a thing as "Live-in landlord" cover? Or should I just be covered by regular "Landlord" insurance despite the fact I live there?

2. Why does the premium nearly double if the landlord lives there? It is completely counter-intuitive - in my experience tenants are far more careful with a property if the landlord lives there too!

Swift/any answers appreciated, my current insurance policy will be cancelled on Monday regardless so I have to find a solution one way or another.

Thanks
Matt

[ashburnham]

Hi Matt,

Buildings insurance should be the easy bit.

If you are all in your own lockable bedrooms with shared facilities then a landlord insurer should class it as a bedsit type set up with you as one of the tenants. This is the easiest and cheapest option by far.

If the tenants have access to the whole house including each others bedrooms then this would be something covered by a normal house insurer but with lodgers being noted in the property. This is probably more difficult to get as well as being more expensive.

Contents insurance is normally tricky in this situation. As you can appreciate, there are people who are milling about your personal goods that are predominately strangers. They may be friends but in the insurers eyes, it is either family or strangers.

A landlords contents insurance will only ever cover general items left in the home for tenants (i.e. carpets, curtains, furniture, etc.) and certainly no personal possessions. A home insurer will be your only option on this (regardless of how you have done your buildings insurance). Once again you will need to inform them of the tenancy situation. As with any insurer, theft cover only applies if there are signs of forcible entry so keep in mind who you are letting stay with you.

The tenant's contents won't be covered on this policy but it is up to them if they want to take out their own tenant's contents policies to protect themselves - best to make them aware of this.

Just a matter of shopping around for people who can help. It's a common situation but you will need to speak to brokers directly on the phone as most online websites do not cater for this kind of set up.

[Triafro]

Thank you for all the responses, it has been very useful and interesting.

This is what I discovered:


I wasn't eligible for any of the landlord insurance policies as I was living there;
Owner occupier insurance policies (building only) were all over £400;
One insurer couldn't insure me because it is a 3 bedroom house with 4 people living in it, 3 of them lodgers;
We don't all have lockable bedroom doors and one insurer wanted to know if I had informed the council about bedsit arrangements which I haven't so decided to stay away from
that one.

Anyway, in the end I ran a normal buildings insurance quote on a well-known price comparison website and when I had the results I set about calling all of the insurers individually and asking how many lodgers they allowed on their policy. The cheapest was my old insurers "insure4retirement" so I knew they only allowed 2 lodgers (which got me into this mess in the first place). The second cheapest was Barclays who said "up to six lodgers" - BINGO!

Barclays re-ran my online quote and noted on the policy that I had 3 lodgers, and as a result the annual premium went up from £145.00 to... £145.99! So I bit their hand off and put an end to an annoying and confusing few days of dealing with insurers.

Thanks for all your help, I hope this thread helps someone else in the future.
Cheers
Matt

[mind the gap]

T
Barclays re-ran my online quote and noted on the policy that I had 3 lodgers, and as a result the annual premium went up from £145.00 to... £145.99! So I bit their hand off and put an end to an annoying and confusing few days of dealing with insurers.



Probably a computer glitch! Meant to say £999.45!

[Mudit]

Dear Matt

I have just come across this thread:

I am in the same frustrating situation and wanted your advice. I have purchased a new 4-bed property, which I will be living in and letting out the other 3 rooms. I have just come across the same problem, whereby I was told that Landlord Insurance was not suitable for me and would be more expensive, which is counter-intuitive like you've said!

Please could you tell me which insurers you found which were suitable for this situation? And did you end up with Landlord Insurance, or normal insurance with "Lodgers" in your policy?

By the way I am looking for both Buildings & Contents.

Thanks in advance for any help and advice.

Regards

Mudit Matanhelia

[mind the gap]

Hi Mudit,

Matt hasn't been on the forum since 24 June, but I have sent him a private message asking him to reply to your query if he can. If he gets email notoification of pms he may notice it. (You do not have enough posts to be able to send pms yet).

mtg