Insurance?

[Cheeks]

Hello

I have just sold my house but want to retain it and rent out the rooms. Obviously, it currently has buildings insurance. However, I am unsure whether I need a different type of Public Liability cover, on the basis that 3rd parties will be in the property? I am assuming that I need to amend the policy, especially if I want rental/legal cover etc, however, I was not sure if the Public Liability cover would need to be changed as well?

Any views on this would be appreciated.

C

[Mortitia]

I'm confused.....how can you have sold your house but be retaining it to rent out?

Yes, if you are renting out you need to inform your current insurer as it is an added risk and you should also inform your lender. Some insurance companies don't do rental properties. If yours doesn't check the net or this site for one that does.

Rent and legal cover is usually a separate item and again there are loads of firms offering it. I don't use it but it might be interesting to hear others opinions on whether it is worth buying.

Mortitia

[Cheeks]

Apologies, I ment to say that I am moving house and renting the old one.

Thanks

I am also worried how the lender will react if I decide to rent the house out, on the basis that it is currently a residential mortgage. As it stands I have a couple of years left on the fixed term and do not want to re-mortgage until it expires (given that its at a competitive rate).

It would be really useful if anyone has experienced this type of thing before and any insight into how lenders view/treat this type of scenario?

Cheeks

[landlord insurance]

You will need to tell both your mortgage and insurance provider that you are moving out and intend to let the home to tenants. I don't know much about the mortgage side of things but it will certainly invalidate your insurance policy if you haven't informed your insurer.

You may be lucky and be with an insurance company that will allow rented properties on the same policy but in 99% of cases you will need to take out a new policy. Landlord buildings insurance will come with property owners liability automatically included. One of the companies we deal with actually includes legal protection for free as well.

The price for this sort of cover is comparable to a normal home buildings policy as long as you deal with a specialist like us.

Like I say, I do not know exactly the situation with mortgages but you will probably find similar issues with that.

[Mortitia]

I hope Landlord Insurance is not touting for business but interestingly shows he is soooo inexperienced that he does not know the answer to the mortgage question.

I would expect a good broker to know this.

Cheeks - don't worrry about telling your lender but you must tell them. They will go one of two ways. Either ask you to convert to a 'buy to let' mortgage or accept the situation, be thankful you are paying customer and let you carry on. The crime is if you don't tell them.

If they want you to convert to 'buy to let' then make sure you are getting a good deal and look at the market for comparisons. Either way you are in a win win situation I would say.

Be happy,

Mortitia

[landlord insurance]

I hope Landlord Insurance is not touting for business...

Surely if I was touting for business I would be putting "Visit this website for help: www..."

...but interestingly shows he is soooo inexperienced that he does not know the answer to the mortgage question.

Most insurance brokers know very little about how mortgages actually work (unless they happen to be a mortgage broker as well), that's why we are insurance brokers! Regulation is so tight on the financial sector now that even if we did know everything about mortgages, we would have to declare that we know nothing as we are only allowed to advise on insurance matters.

Cheeks - don't worrry about telling your lender but you must tell them.

This doesn't really make much sense does it?

Mortitia, when someone is looking for help and an expert in the field gives advice on this (albeit only the insurance side of the question) then I don't really expect a reply like yours. If there is anything wrong in what I have said then feel free to question it and I will try to resolve the matter but please don't question my intentions or experience.

[Melboy]

You must inform your insurance company as the conditions of contract have changed between the two of you. They will not pay out in th event of a claim if you do not disclose changes.

You must inform your Mortgage company as well because again the contract has altered between the two of you. Straightforward enough and yes, there may be additional tax deductable costs you may occur.

Mel.