Renting out a property can be a worthwhile means to earn extra income. However, there are many potential pitfalls, and responsibilities, to take into consideration.
Insurance, while it can seem like a grudge spend, is a vital form of protection that landlords should consider. We spoke to an expert to find out more.
Rental insurance hints and tips
Wynand van Vuuren, client experience partner at King Price Insurance, notes that there are seven insurance-related actions to take when it comes to renting out a property.
These are as follows.
- Take responsibility for the payment of the insurance premium and ensure that cover is always in place.
- Ensure your tenant is aware of the conditions of the insurance policy, and that both you and your tenant comply with these. The conditions will be stipulated in the policy schedule and wording.
- Take responsibility for the maintenance of the property. Damage due to negligence is not covered by short-term insurance. Don’t leave this in the hands of the tenant.
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- Visit the property regularly to ensure that it’s being maintained properly - and that the tenant is in residence. Most short-term insurance policies do not cover for theft or intentional damage if the property was vacant at the time of the incident. Van Vuuren notes that the definition of “vacant” can vary among insurers. An overnight absence doesn’t constitute a vacancy, he says. King Price Insurance sets the limit at 45 consecutive days - but be sure to check the period shown in your policy.
- Communicate regularly with the tenant, to ensure you are updated of any changes. Communicate these changes to your insurer, as they may influence your premium and the conditions of your cover.
- Inform your insurer when contractors are working on the premises. This may limit your cover and the conditions thereof.
- If the property you are renting out is furnished, then insure the furniture under the home contents section of the policy.
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