UK Landlord Forum / Life

The topic of misselling insurance has been around for a while but I can't seem to find much on insurance on a house which is let.

My father became ill and I moved home to look after him so I let my house. I let the insurance company know and they said - no problem and changed my insurance policy to cover letting.

Engaging a letting agent (at 12% commission + other charges) to fully manage the property turned into a complete disaster. I ended up serving a court order to regain possession with considerable damage to the property.

Since the insurance provided cover for letting purposes I expected it to cover me to take legal action against the agent for breach of contract.

The insurance company tell me I am not covered for anything to do with tenancy disputes and refuse to cover solicitors costs.

I thought the insurance company issued me with a landlords policy - according to them it was just to cover letting.

Could this be classified as miss-sold insurance? - Can anyone help???

Otherwise -  I will have paid insurance premiums, agency fees, court costs, suffered damage to the property and now expected to pay solicitors fees to take action against the agent which may or may not cover the losses.

Hello PoDo,

You're unlikely to like this advice.  You've probably not been mis-sold.  You've probably mis-understood what you're buying.  As a landlord you've got two kinds of insurance you're likely to buy:
1 = Damage to Buildings and Contents.  Depending upon how much you're willing to pay your insurer amy (or may not) offer cover for damage done by incumbent tenant.  And there could be string, like no DSS.
2 = Insurance against the tenant not fulfiling the financial aspects of the rent agrement.  This policy is likely to cover the short-fall on missed rent payments and also consequential financial costs, like eviction costs.

It looks like you bought a cover type 1, thinking it was 2, or included 2.

Whether you were mis-sold depends on a number of things:
- Did you buy direct from the insurer, or vai an intermediary?  The latter usually has a duty of care to ensure you get what you want to buy;
- Assuming you bought the insurance fairly recdently, did they issue you with a KeyFacts sheet about what you were buying.

Let us know.  Thanks.

Thanks for your reply -to explain further

1.) The property was already insured as my home for buildings and contents and I informed the insurer I was about to let.
They told me I needed to change the policy and for them it wasn't a problem and the premium was adapted to suit - I would have thought they had a duty of care to provide the right product.

2.) I also had another buildings and contents policy with them that also covered costs for personal legal assistance - which also covered breach of contract - the Agent was supposed to be providing a service after all.

But with an exclusion - nothing to do with tenancy disputes - their interpretation? - it didn't provide cover in this case because the contract in question related to a tenancy dispute.

I find hard to believe there's so much wriggle room that insurance wouldn't cover in both cases and there isn't a case for misselling.

Hello PoDo,

Thanks for the extra info.  Regarding your first Houseowner policy, the one I'm assuming you arrange directly with the insurer: When you lived in it as your home, you would not have had legal cover when you lived there to cover your activities as landlord.  So when you advised your insurer of your change of circumstances, they simplly re-priced the cover you had already bought.  If you deal directly with an insurer, they do not automatically owe you a duty of care to offer advice over whether the cover you are buying remains correct in changed circumstances.

I have no idea why you had a second policy to cover the same stuff + legal expenses.  Was this through the insurer or aranged via the lettings agent?  But if it's a domestic policy, the expenses section it will not cover your activities as a landlord.  If it was bought via your insurer, then this probably is not mis-selling.  But if it was bought via your agent, then there's a good chance it is mis-selling.  Your agent will understand the cover depth you might need and should make you aware of what you do / don't get.

Hope this helps

Thanks for the reply.  According to the Houseowner policy, you can arrange them directly with the insurer. If you bought the property with the help of your agent, there is a chance of mis-selling. You can take visit the link below and they will take care of your property management services.
http://bb.lsmo.com/post/Property-investment-5982407

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lincoln property management