Not content with insurers

April 2012

Question

I have properties which are rented out. When obtaining insurance quotes through insurance companies or brokers, I am being forced to have contents insurance included as part of the policy.

I tried to get building-only insurance but the insurers insist on contents also. I do not require this as it is an unnecessary expense.

Their argument is it is included or “free”. However, if this is universal policy throughout the industry, surely there is no actual choice and it is in effect costed in. In essence, is it not unfair trading and contrary to Irish and EU consumer rights?

Answer

It is not universal policy throughout the insurance industry to have contents insurance included as part of a buildings policy. However, having adequate insurance cover is a critical step in ensuring that you protect your investment and avoid any financial losses associated with your rental properties. Unlike owner-occupied properties, landlords do not normally need full contents cover. Generally the policy should provide cover for the building and liability arising from the ownership, with the option of insuring any contents that belong to the landlord that are inside, such as electrical appliances, carpets, curtains, blinds etc.

A rental property would typically involve a much lower contents figure than an owner-occupied property, as the tenant is responsible for arranging insurance on their own contents.

With the varying levels of cover available it is worth doing your research and reading through the terms and conditions of the various policies you are offered to understand exactly what you are/are not going to be covered for.

There is a wide range of insurance brokers offering insurance solutions for landlords. It would be my recommendation that you shop around and choose a broker that has experience of investment property policies — they will have experience in identifying the best policy to meet your requirements. There are also a number of websites offering online quotations for landlords.

Siobhan O’Dwyer is chairman of the Property Facilities Management Professional Group of the Society of Chartered Surveyors Ireland.