If you decide to rent out your house you must notify your insurer — That is the message being sent loud and clear to landlords.
Leading home insurance experts at www.insuremyhouse.ie caution of trouble down the line in relation to home insurance claims made by Ireland’s “accidental landlords”. The experts claim that many homeowners have, in recent years, rented out rooms or indeed the entire property, as a source of income.
While this may have made good financial sense, Jonathan Hehir, Managing Director of www.insuremyhouse.ie is now warning of the perils attached to this line of action.
“We’ve seen this cohort of people struggling to get insurance claims paid due to their failure to notify insurers of the “change of purpose” of the property or of a change in tenant profile”.
“Most recent statistics from the Residential Tenancies Board (RTB ) reveal there are a total of 323,271 tenancies registered, representing 172,121 landlords and 704,332 occupants. The number of landlords in the country is growing, with the number of new registrations with the RTB for Q2 2016 alone standing at 22,103.
“While some of these would be classed as “professional landlords”, many are simply people with only one or two properties to rent, who may not be very adept at their new “occupation” or are not sure of what they need to do.
“We suspect that a significant proportion of these landlords have the incorrect insurance in place. If the house was to flood, or if a tenant decided to make a claim against the homeowner’s policy, the policy holder is left wide open if they do not have the correct insurance policy in place”.
Data from the most recent RTB Rent Index confirms that Dublin remains the largest rental market, with Dublin post codes accounting for close to one third of properties on the market, while other urban centres (Cork, Limerick, Waterford and Galway ) account for 14 per cent of rental properties. Insuremyhouse.ie ran cost comparison figures for three different profiles of renter in six of the main cities in the country:
Jonathan continued, “These figures show that while renting your property to a family is a safer financial proposition as home insurance for these properties represents best value, Galway is one of the more expensive cities of the six.
“In addition, if the property is used as student accommodation, landlords can expect to pay significantly more for their policy.
It might seem unfair but insurers definitely classify students as being a greater risk than families when it comes to policies. Insurers don’t pick the figures from thin air, they are based on supporting claims experience. If you fail to disclose that you have rented your property to studenst, they are very likely to decline a claim even where the tenant hasn’t contributed to the loss”.