Home Rental Insurance Advice

December 25 - Taking out insurance on your own home and its contents is quite a straight forward procedure and coverage is usually complete when all factors are taken into account.

However, home owners may be surprised to learn that they are required to advise their insurance companies if they decide to rent out their homes during the holiday season or on a longer term basis.

Paul Goodall, speaking for Lion of Africa Insurance said: "The key is letting your insurance company know of your plans to have a tenant in your house. Keeping your insurer informed of your changing situation and discussing how this affects your cover is the best way to ensure that you are protected by possible losses."

Many home owners, fearing huge jumps in their insurance premiums because of the status of their homes, may avoid contacting their insurers, however Goodall reassures them that in most cases the increase will barely be felt and could save a lot of stress and financial hardship on a long term basis. "People tend to try and avoid this potential premium increase by not informing their insurers," says Goodhall. "However, most of the time, the increase isn't as substantial as anticipated, and could save a lot of money in the long run."

A case in point is in the case of theft. Homeowners and household insurance policies (two different types of insurance generally covering homes), both state that if a property is let, damage or loss resulting from theft is only covered if it can be proved that the crime was accompanied by forcible entry. Clearly, this means that if the tenant walks off with half the household contents and disappears without paying the rent, property owners have no recourse of claiming back for their losses.

Goodall concludes: "Informing your insurer of your intention to let your property is unlikely to increase your premium significantly; if at all. In fact, some insurance companies consider that renting to three or less people does not constitute letting or sub letting at all. However, it falls to the owners to check their policies to make sure that their insurance is not limited or restricted."