If you wish to rent out your apartment or home in the Netherlands, there are a few things you need to take into account. There is of course the contract for tenants you need to think about, as well as the amount of rent you wish to ask. However, insurances are right next to these two subjects in terms of importance.
There are a few different insurances you need when renting out a house. Some are quite comparable to the insurances you take out when living in the property yourself. However, rental properties pose properties pose unique risks, since you have tenants living in it for longer periods of time. No matter how neat and proper your tenants are, accidents can happen, and the rental property insurance covers these risks so you are not left empty-handed.
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What does a rental insurance property cover?
Like we said before, a homeowner insurance does not cover all risks regarding tenants. A rental property insurance mostly covers:
1. The property itself
Comparable to the homeowners insurance, a rental property insurance covers damage to the structure of the home or the apartment. If your property receives damage to its walls, floor or roof for example, this insurance will cover it. It also often covers damage to any other structures on your property like sheds and fences. What kind of accidents and damages the insurance will cover could differ slightly depending on the insurance company, so make sure to read your policy carefully. Your insurance could cover damage caused by a fire or storm for example, but might not cover this damage if you have a thatched roof.
Keep in mind that this insurance does not cover any personal items of your tenants. For example, if your tenant brings their own tv set and it gets damaged in a fire, is it not covered by your rental property insurance. We always advise your tentants to take out their own household content insurance so they are covered for their own furniture and belongings.
2. Covering for the landlord’s personal property
While a rental property insurance does not cover any personal items of your tenants, it does cover some items you leave at the property as the landlord. For example, if you leave a vacuum cleaner at your rental property and it is damaged in a fire, the damage to the vacuum cleaner would be covered by your rental property insurance (if fire is a damage that is a covered peril in your policy).
What kind of coverage you get differs from insurance company to insurance company, so please read the policies carefully. In some cases the coverage of your personal items is offered as an add-on. In other cases, this coverage will be seen as an appliance insurance. This means that only the appliances needed to service the home or apartment will be covered, like a washer-dryer or dishwasher. A tv set on the other hand will not be in this list.
Household contents insurance
With all the differences between the rental property insurances and what is viewed as appliances and items that serve the home or apartment, a household content insurance (in Dutch inboedelverzekering) might be the solution. If you rent out your property fully furnished, this additional insurance will also cover furnishing like couches and tv sets against damage caused by storms, burglary, explosion, water and other factors. The total amount insured will usually be subject to the average value of the contents in a house, so it is important that you know what you have in your property.
Tip: before you rent our your property, photograph the appliances in the home. If you have new appliances, make sure to save the receipts so you can show them to the insurance company if what they offer you does not compare to the value of the contents you know are (were) in your property.
I wish to rent out one or multiple rooms
Please note that if you wish to rent out one room, a homeowner insurance might not always cover all risks. We advise you to read your insurance policy carefully before renting out the room or rooms so you won’t face an unpleasant surprise in case of damage.
We can help you understand what types of scenarios may and may not be covered by homeowners insurance while you’re renting your home or part of your home to tenants. Please contact us for more information about this or other subjects you would like to receive more information about.
Should I take out additional insurances for my property?
If you are renting out a house or apartment, you scould consider to take out the following additional insurances:
- liability insurance: With this you insure the damage caused by the building to others or other people’s belongings. It will protect you from from the legal and medical costs associated with someone (either your tenant or their visitor) being injured on your rental property.
- legal aid insurance: to cover for the legal costs that may arise from a possible dispute (for example disputes with your tenants, but also the neighbors of your property or the municipality where your property is situated)
Which insurances are suitable for my situation?
In order to choose a suitable insurance with all necessary additional insurances, it is best to speak to an advisor with experience in buy to let properties. He or she knows the property, the surrounding area and has a broad network with several experts (in case your need a valuation report for example). The advisor can easily compare insurances and help protect you against double insurance and underinsurance.
If you would like to know which insurances suit you best, please contact us for more information.