Insurance for letting (and renting) a property

Letting a property comes with responsibilities. Many private landlords are unaware that a standard homeowner’s insurance policy may no longer provide sufficient coverage once a property is rented out. This can lead to unpleasant surprises if damage occurs.

What happens if a tenant causes a fire? Who is liable if a roof tile comes loose and causes injury? And are you still insured if you fail to inform your insurer that the property is being let?

In this article, we explain which insurance policies are important when letting a property and what landlords should pay attention to.

The basic principle: everyone insures their own belongings

When it comes to letting property, there is a simple rule: everyone insures their own possessions. The landlord insures the property and any belongings that remain part of the rental. The tenant insures their personal belongings. This means, for example, that a landlord cannot insure a tenant’s contents and vice versa.

Which insurance policies are legally required?

In the Netherlands, only a limited number of insurance policies are mandatory by law:

• Third party motor vehicle insurance
• Health insurance

Personal liability insurance is therefore not legally required, although it is strongly recommended.

For landlords, however, there are additional considerations.

Building insurance

Building insurance is one of the most important insurance policies for landlords.

This insurance covers damage to the permanent parts of the property, including:

• Walls
• Roof
• Kitchen
• Bathroom
• Pipework
• Shed or garage
• Solar panels
• Heat pump
• Electric vehicle charging point

Examples of events typically covered by building insurance include fire, storms, lightning strikes and water damage.

Always notify your insurer

Many insurers regard letting a property as an increased risk. As a result, letting must almost always be reported.

Some insurers accept rented properties under amended terms and conditions. Others may refuse cover altogether.

If letting is not disclosed and damage occurs, there is a risk that an insurance claim may be partially or fully rejected.

Contents insurance

Contents insurance covers movable items within a property.

For a furnished property, this may include:

• Furniture
• Appliances
• Lighting
• Curtains

Even in a partially furnished property, contents insurance can be relevant. Many landlords are unaware that a floating laminate floor is generally considered contents rather than part of the building structure.

If you let a furnished property, it is advisable to assess whether the value of the furnishings justifies insurance cover.

Liability insurance

A property itself can cause damage.

Examples include:

• A loose roof tile damaging a parked vehicle
• A defective handrail causing someone to fall
• A structural defect resulting in personal injury

Claims involving personal injury can be substantial.

For this reason, landlords should ensure that they have liability insurance that specifically covers the letting of property to third parties. In many cases, this will involve a business liability policy or an extended form of liability cover.

Glass insurance

Glass insurance is often included within a building insurance policy, but this is not always the case.

It is therefore advisable to check whether glass damage is covered and whether the letting of the property has been registered with the insurer.

Apartments and homeowners’ associations

For apartments, building insurance is often arranged collectively through the homeowners’ association.

However, this does not automatically mean that the insurer is aware that individual units are being let.

Landlords should therefore verify:

• Whether letting is permitted under the building regulations
• Whether the homeowners’ association insurance policy takes rented apartments into account
• Whether additional insurance cover may be required

For homeowners’ associations, directors’ liability insurance or business liability insurance may also be worth considering.

Letting to students or specific tenant groups

Not all insurers apply the same underwriting criteria.

Letting to students, shared occupancy arrangements or certain tenant categories may result in adjusted policy conditions, higher premiums or restrictions in coverage.

It is therefore important to confirm in advance that the intended letting arrangement is acceptable to the insurer.

What should tenants insure?

For tenants, the following insurance policies are generally most relevant.

Contents insurance

This covers personal belongings against risks such as fire, theft and water damage.

Liability insurance

Liability insurance is recommended for damage caused to third parties.

It is important to note that damage caused by a tenant to the rented property itself is often not covered under a standard personal liability policy. This is because the property falls under what Dutch insurers refer to as opzicht, meaning items entrusted to the tenant’s care or under their control.

Travel insurance does not provide cover

Some people assume that damage occurring in a rented property can be claimed under a travel insurance policy.

In the Netherlands, this is generally not the case. Travel insurance is intended for holidays and travel related incidents and usually requires travel documentation or booking confirmations. Damage relating to a regular rental property is normally excluded.

Avoid unpleasant surprises

The most important advice for every landlord is straightforward: always inform your insurer if you intend to let your property.

A rented property presents different risks than a property occupied by its owner. Insurers need to be aware of this so they can apply the appropriate premium, terms and coverage.

A simple phone call before the tenancy begins can prevent significant problems if damage occurs later.

Not sure which insurance policies are appropriate for your situation? Interhouse will be happy to help identify the key considerations involved in letting your property.