icklesweet Posted December 13, 2011 Posted December 13, 2011 Someone told me the other day that Landlords insurance is invalid if your mortgage lender does not know you rent your house out, or you have dont have a buy to let mortgage. Does any one know if this is correct?
mafya Posted December 13, 2011 Posted December 13, 2011 Someone told me the other day that Landlords insurance is invalid if your mortgage lender does not know you rent your house out, or you have dont have a buy to let mortgage. Does any one know if this is correct? If you have a normal mortgage and then rent the house out the mortgage company will not be pleased and could demand full repayment of the mortgage or switch you to a buy to let mortgage that is a higher rate. I would imagine your landlord insurance would be void as you are not legally a landlord.
Cyclone Posted December 13, 2011 Posted December 13, 2011 I would think that it depends on the small print. Not having the right type of mortgage doesn't mean you aren't a landlord, so I doubt the insurance is invalidated that way, but it could land you in hot water with your mortgage provider.
Jeffrey Shaw Posted December 13, 2011 Posted December 13, 2011 Yes, generally. Insurance contracts are uberrimae fidei (= ' of the utmost good faith'). This means that a policyholder (or prospective policyholder) has to volunteer all relevant information relevant to a typical insurer and taken into account in assessing an insurance risk prior to issue of a policy. Non-disclosure is therefore likely to invalidate the policy; and it's a bad idea to discover this only when making a sizeable claim! NB The law might be changing soon. The Consumer Insurance (Disclosure and Representations) Bill will probably be presented to Parliament next year. See http://www.justice.gov.uk/lawcommission/areas/insurance-contract-law.htm
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