MY good friends at Property 118 have been working hard to educate landlords on what they need to operate their businesses and brought to my attention the need for Rent to Rent insurance.
I cannot urge you enough to visit Property 118 and join their action group, it is vital that landlords stick together when being attacked from all quarters on tax, regulation and fundamental viability.
Basically if you rent a property to an association, business or individual who then sublets it to a tenant, this is Rent to Rent. This cannot be insured by a normal landlord insurance policy. It needs a specific Rent to Rent Insurance scheme and these are like hen’s teeth – very hard to find.
Once educated that my own Rent to Rent property was not covered by a standard insurance policy I went searching for a solution. For me and for Property 118 and for The Home Insurer.
Not many insurers are interested. They like traditional insurance where the landlord has an AST with a tenant who is a certain type – student, working professional, family, asylum seeker etc. As long as the insurer knows what is going on they will give you a price and it is up to you whether you accept or not.
With Rent to rent Insurance the landlord has contracted with an agent who then puts in a tenant without referring to the landlord. That means there is no information on the tenant type, length of tenancy etc. It increases the risk of a claim to the insurers enormously and that means you need a special policy to deal with it.
Thankfully I was able to source an excellent policy through a major UK player. It is like a best kept secret. Yes, they can do sublet insurance but it’s not something they are shouting about.
Basically they sell a standard landlord insurance policy to you and then add a policy endorsement that says you can sublet. That little endorsement means you can happily go Rent to Rent without any fear if you ever need to make a claim.
The downside is that it costs more than a standard landlord insurance policy. It is a different product with additional risk, so it will logically cost more. But not a huge amount more. Certainly in my case it was well worth the small extra every month to make sure my property was covered.
The Property Insurer partners with Property 118 so you can buy your sublet insurance there and find out all the other benefits on offer.