Renting out your property can be a fantastic way to earn some extra income from a property that you are not using. Whether you own a property conveniently located in the centre of Bristol or out in a popular leafy suburb like Redland or Cotham, the opportunity to make some money on the side or earn a respectable income is real.
One thing you won’t want to forget is your landlord insurance though. So what do you have to know about this?
Tell Your Current Insurer
Start by telling your current insurer about your plans. You may find that they can extend your existing policy in return for a fee or a higher premium. Alternatively, they may simply say that they are unable to insure you for hosting paying guests.
If you go ahead and let out a room or your home to paying guests, but you don’t tell your insurer, then they may in future refuse to pay out on a future claim. This claim might not have anything to do with the guest, but they might see you as withholding information from them that increases the level of risk, leading to your insurance being invalidated.
Be aware that even if you can get your home insurance extended, you may not be able to get cover for accidental damage by a paying guest (for example, if they damage your fixtures or fittings). So always make sure you know exactly what is covered.
Is Standard Landlord Insurance Enough?
Standard landlord insurance is typically suitable for landlords letting their properties for longer periods of time, and in this case, you would normally have an Assured Shorthold Tenancy (AST) agreement in place.
The length of time that the property is occupied makes a big difference in the type of insurance you need. When you buy standard buy-to-let insurance, this is usually on the basis that the property will be inhabited for most of the year.
Letting your property for days or weeks at a time is a different situation compared to letting your property out for six months or longer. Not only is the property likely to remain empty for longer periods of time, but there will also be multiple guests coming and going without the same reference checks you would carry out for longer-term tenants.
This presents a greater risk to insurers, who may therefore be reluctant to offer you regular landlord insurance.
Contact a Specialist Insurer or Broker
You will want to find an insurer that can cover your property for short holiday lets. The mainstream insurers are not the best option here because they often think it is too risky. So look for specialists or local Bristol insurance brokers.
Specialist brokers, especially those that are local, can often tailor a quote to your situation and provide all the cover you need. Use the British Insurance Brokers’ Association’s website to get started. There are also a few brokers listed at MoneySavingExpert that can provide cover for holiday lets.
Some insurers may provide cover by the day, whereas others might provide cover in short periods of a few weeks or months at a time.
Some insurers may offer bolt-on policies. If you choose one of these, make sure your current insurer is still happy to provide your cover if you have paying guests. Then you can use the bolt-on as additional protection without invalidating your existing insurance.
What You Need to Cover
When you start looking for specialist landlord insurance for holiday lets, there are certain things you should be looking out for:
Damage to the Building or Contents
You will need to cover your buildings and contents because, while the risk is low, accidents can happen – and sometimes you can get a bad guest. It’s important to make sure your belongings are covered, especially expensive things like furniture.
Cover for Theft
While you hope no guests will steal anything, it does happen and is therefore a risk you absolutely must protect yourself from.
Public Liability Insurance
If a guest is injured while staying in your property, they may want to claim compensation. You need to get cover for this because it’s your duty to ensure your property is safe for your guests. Accidents happen, so make sure you are covered.
You may find that some insurance policies provide extras such as cover for lost keys and replacement locks. You may even be able to find cover that provides alternative accommodation for your guests should something go wrong and you are unable to provide them with the accommodation you have agreed.
Some insurance policies might even provide legal assistance should your guests overstay the agreed time limit and refuse to leave. This is an unlikely scenario, but one you may feel you want to get cover for.
Always Get Suitable Landlord Insurance
Landlord insurance might be one of the less interesting things to consider when you let out your property to paying guests but it is also incredibly important should things go wrong. If you don’t have suitable insurance in place, you could find that your dream of earning an income from letting your property quickly turning into a financial nightmare.
Make sure you are prepared. Find insurance that covers you for letting your property to paying guests, and enjoy letting your property without having to worry about the potentially serious problems that you could find yourself in without the right insurance policy in place.