Can tenant be forced to take out contents insurance?

mlz1413

tbs624 wrote: »

That's the purpose of taking a tenancy deposit.........:)
QUOTE]

That is also the reason for insurance............:)

Deposit = a few hundred quid to cover non payment and damage.

Insurance = replacement of damaged items, leaving deposit to pay for non payment / act as incentive to leave the place clean and tidy.

Know which I'd go for

G_M

mlz1413 wrote: »

tbs624 wrote: »

That's the purpose of taking a tenancy deposit.........:)
QUOTE]

That is also the reason for insurance............:)

Deposit = a few hundred quid to cover non payment and damage.

Insurance = replacement of damaged items, leaving deposit to pay for non payment / act as incentive to leave the place clean and tidy.

Know which I'd go for

LL gets (admittedly limited) protection of his contents via the deposit. If he wants them insured as well (which is wise unless the property is unfurnished or just has a couple of white goods) then he should insure them himself. It costs peanuts but making the tenant pay is
a) unjustified and
b) stupid as it alienates the tenant before the tenancy has even started. That's going to make for a good ongoing relationship isn't it?!

mlz1413

I agree it's not fair but I can see why it is asked for in fully furnitured lets.

I agree with your previous post that now T is in with a signed contract then the LA probably has little power to enforce this requirement.

G_M

mlz1413 wrote: »

I agree it's not fair but I can see why it is asked for in fully furnitured lets.

I can't. Landlord wants insurance for his fully furnished property? Take out insurance! Landlord's insurance.

robcauson

The legalities of mandatory insurance are somewhat open to interpretation, so I'll give you my personal take on the OFT guidance regarding insurance terms in tenancy agreements, but bear in mind that like a few people have said, a full yes or no is only ever going to be decided in court. Everything that happens before a judgment is made is only ever guidance and interpretation.

The type of policy that's specified in the TA is a third party liability policy, which can be made mandatory (in general terms). Nobody can be forced to insure there own things (hence the availability of third party car insurance), and you can't insure somebody else's things (because you need financial interest in the insured item(s), meaning you have to be able to show that you would suffer direct financial loss through loss or damage to the item(s)). However, an individual is entitled to request a third party liability policy before allowing access to their property or possessions.

Because the tenant is responsible for damage to the landlord's property and possessions (as defined by the TA) they can insure that liability, which is what the policy covers: accidental damage to the landlord's property and possessions for which the tenant is reasonably held responsible under the terms of their tenancy agreement. From the landlord's point of view, this provides additional protection for their stuff; from the tenant's point of view, it provides a means to ensure they receive their deposit back at the end of the tenancy, because they can claim on their policy instead. (Sorry if that sounds a bit salesy; it's not meant to! I just want to try to explain why people buy these things.)

The two sections in the OFT guidance mentioned in a couple of other posts that are specifically relevant to this type of thing read as follows:

Section 4.4: Compulsory insurance - we object in particular to terms requiring tenants to purchase specific insurance, or insurance provided by an insurer specified by the landlord or agent. This may provide the landlord or agent with additional income by way of commission at the expense of the tenant having to pay higher premiums than on the open market. In such circumstances this is effectively a disguised addition to rent and, in the absence of market forces, the tenant will have no protection against unreasonable premium increases (see also our views below on compulsory contents insurance).

Section 4.8: Unnecessary insurance requirements - we consider that whether tenants wish to insure their own personal belongings is a matter for them and it is unreasonable for the landlord to make this a contractual requirement.

So, based on that guidance, a tenant can't be forced to buy a specific policy from a specific provider, which means they have to be given the opportunity to purchase from any provider, as long as the cover is suitable. Secondly, they can't be forced to insure their own possessions, which means they can buy a liability insurance policy without insuring their own stuff. It's probably worth noting that the reason we sell tenant liability insurance on it's own is so that a tenant doesn't have to buy a full contents policy to get the cover.

To satisfy the clause that says you need to have adequate insurance, you can buy a policy anywhere, from anyone, as long as it's the right kind of policy, and you can change your provider whenever you want, meaning you are free to shop around for the best premiums.

The question of cancelling a policy once you've moved in is really up to you. If you accept that the interpretation I've given is correct, then it would be dishonest to set up a policy and move into someone's property on the basis that you have one, then cancel it; but if you don't accept that interpretation then you probably shouldn't be giving the impression that you do accept it. I know that sort of statement is likely to ellicit a strong response so I'll state for the record that I'm only really typing as I think. I'm a tenant myself and I have a full contents policy that includes liability cover. I've claimed on my policy a couple of times and it's helped me out. I know that's the oldest sales trick in the book (talking about the fact that I have a policy myself) but it's no lie. I firmly believe that whatever your take on insurance or sales or whatever else, it's important to be honest about what you're doing and what you've got.

If you have a genuine reason for not wanting to take a policy out, whatever that reason might be, then speak to the agent about it. Too many problems are caused in lettings by people (and I mean all parties, not just one side or the other) assuming what will happen if they say or do certain things, when a lot of things can be avoided or resolved just by having an honest conversation about them. I'll make a couple of sweeping generalisations to illustrate my point: landlords/agents all think tenants are going to rip them off; tenants all think landlords/agents are going to rip them off. (Like I say: generalisations. I'm not claiming that's always the case!) If you're worried about anything, or disagree with anything, just talk about it. That'll invariably result in a better situation than not doing so.

Anyway, I've rambled on for quite long enough, I think. Really I'm just trying to give a bit more information on the subject. Like I say, guidance is always open to interpretation, so I'm only giving one interpretation, but the bit about honesty I'll certainly stand by. I'm not trying to imply that everyone's dishonest, but often the generic reputation of a group, or type of people, or person can precede them and cause more problems than the actual issue at hand!

Does anyone agree with what I've said or do you think I'm completely off the mark?

delain

My tenency says I must have contents insurance, but I don't object too much because I don't rent through an agency and my LL wants long term tenants

Heliflyguy

robcauson wrote: »

Does anyone agree with what I've said or do you think I'm completely off the mark?

I think you are off the mark.

As far as I am aware the LL is not entitled to betterment if the insurance policy is new for old then this becomes the case.

Plus I dont want to be paying increased insurance premiums for the benefit of the LL, the deposit is there for any damage.

casper_g

Heliflyguy wrote: »

I think you are off the mark.

As far as I am aware the LL is not entitled to betterment if the insurance policy is new for old then this becomes the case.

Would a tenant's liability policy provide new-for-old replacement, though? The policy covers the tenant's liablility. If the tenant damages something and is only liable to cover the replacement cost less an allowance for wear and tear, why would the insurers want to pay out more than they were liable to pay out?

Insurers are usually pretty hot on these things, and the landlord might well find he would have a better chance of bamboozling a tenant into agreeing to pay for new-for-old replacements than doing the same with an insurer!

tbs624

casper_g wrote: »

Insurers are usually pretty hot on these things, and the landlord might well find he would have a better chance of bamboozling a tenant into agreeing to pay for new-for-old replacements than doing the same with an insurer!

Not a tenant who reads this board - LLs may not use Ts funds as a new for old insurance alternative. Betterment.........