Large numbers of accidental landlords are risking being unable to make an insurance claim because they have not made it clear they are renting out their property.
Accidental landlords are people who bought an apartment or home to live in, but have since rented it out because they may need something bigger for their growing family.
But they are likely to have any insurance claim on their property turned down if they do not make it clear to their insurer that they are renting out the property.
Home insurance broker InsureMyHouse.ie said thousands of those renting out apartments and houses had not told their insurers about this, which could invalidate their policies.
Jonathan Hehir of InsureMyHouse.ie said many accidental landlords were taking a risk by either deliberately or mistakenly not making it clear they were renting out the property.
“We have seen this cohort of people struggling to get insurance claims paid due to their failure to notify insurers of the ‘change of purpose’ of the property or of a change in tenant profile,” he said.
He said it was easier for a landlord to get insurance if they were renting to a family than to students, as the risks of damage tended to be greater.
It is not clear how many of the 172,000 landlords registered with the Residential Tenancies Board are accidental landlords. But it is thought that a large proportion of them fall into this category.
The warning about the need to be upfront with insurers comes after the Financial Services Ombudsman warned that insurers were increasingly turning down claims.
Ombudsman Ger Deering accused insurers of failing to pay out on claims by saying consumers had not disclosed all relevant facts when taking out the policy. “I have been concerned to note, in a number of complaints to this office, the manner in which some banks and insurance companies either denied or curtailed services to customers,” he said.
Insurance companies would refuse to pay out if they were not told about a previous claim when the policy was taken out, Mr Deering said.
In a bid to keep accidental landlords in the market and boost supply, the Department of Finance is considering giving them tax breaks.
The department has set out a range of possible tax reliefs which might be applied to encourage landlords to remain in, or to enter, the rental market as a way to boost supply.
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Source: Irish Independent