It’s not surprising that over the last 18 months our attention has moved from the impact of Brexit to the Coronavirus pandemic. Our exit from the EU brought about many changes to rules, regulations and legislation which have, to an extent, gone unnoticed.
One important change applies where overseas landlords who rent out property in the UK have in place ‘Landlord Insurance’ cover (not just for buildings and contents but also accidental damage and rent guarantee etc) provided by a UK based insurance provider.
Below are the effects of these changes, how they impact on your overseas landlords and what can be done by you and them to avoid the pitfalls.
As a professional agent, contacting your overseas landlords and passing on this information is a great way of demonstrating your commitment to protecting their interests and cementing your ongoing relationship with them.
While the UK was part of the EU there was a reciprocal agreement known as ‘Passporting’ which allowed UK based insurance companies to offer and provide cover for landlords living in the EU who were renting out properties located in the UK.
The Passporting agreement no longer exists and not all UK based insurers now have the right or authority to offer or continue to provide cover for overseas landlords.
Most insurers will have written to their overseas clients notifying them of the change however if this has not happened, or the landlord has not received the communication, then they are at risk – financially.
TIP: Landlords with insurance already in place should contact their insurers at the earliest opportunity as their policy may no longer be valid, even if premiums have been paid in full.
Before purchasing insurance cover for rented properties landlords would be well advised to check that the insurers are authorised and able to provide cover for overseas landlords.
TIP: Applying online? It’s usually possible to view a copy of the general policy documents on the company’s website. If still not clear give the insurer a call – and them to confirm – in writing!
A landlord can have someone in the UK looking after their property but the correspondence address on the insurance policy must be the landlord’s actual correspondence address. If there is a UK address on the initial application then the insurers could also be unaware of the landlord’s overseas status and this would only become apparent when a claim is made.
TIP: When applying online if there’s no facility to enter a non-UK address for the correspondence address non-UK residents may not be covered.
Where an insurer or a broker advises the landlord to use the postal address of someone else residing in the UK such as a family member or friend on the application…..
TIP: BEWARE! the likelihood is that this action will invalidate the policy and any claims!!
Misinformed: Avoiding the problem in the first case will always be the best outcome for everyone. But if a landlord can prove that they were given incorrect information by an insurer or broker (as above) then they would be able to make a claim against the company or individual concerned. Unfortunately claims of this nature can take up a lot of time and cost a great deal of money!
The author, Gill Waller is Compliance & Development Manager for The Letting Partnership.