A leak or a broken boiler happens in a rented flat too. The question is who pays. Insuring a flat you let out is different from insuring your own home: the risks are different, the liability is different, and when something goes wrong, more people are involved.
Standard home insurance isn't always enough
Many policies treat a rented flat differently from one you live in. Check the terms, and tell your insurer that you're letting the flat. If you don't, the insurer may reduce or refuse the payout when you make a claim.
Typical points to look for in the terms:
- Whether the policy covers a rented flat, and if so, with what exclusions.
- Theft cover: many policies only pay for burglary, not theft by a tenant who has a key.
- Intentional or negligent damage: what happens if the tenant causes the damage.
- Empty periods: some insurers are stricter if the flat stands empty for months.
What should it cover?
- Building and contents: the flat itself and your furniture and appliances.
- Liability cover: for example, if water leaks from your flat into the neighbour's.
- Glass breakage and appliances: these damages are more common in rented flats.
Liability cover is the part most often underestimated. A burst flexible hose can flood two flats below overnight, and the damage can easily run into millions of forints. In that case the owner is liable to the neighbours, even if a tenant lives in the flat.
How much should you insure for?
Insure the building at its rebuild value, not its market price. Insure the contents for what it would cost to replace them. If you're underinsured, the insurer only pays a proportional share of a claim.
The tenant's belongings
Your policy typically doesn't cover the tenant's own belongings. They need their own insurance for that. It's worth telling them when they move in.
Many tenants don't know this, and only find out after a break-in. A short sentence in the lease, or a word at move-in, goes a long way: "The landlord's insurance does not cover the tenant's personal belongings."
Who pays for the damage?
It depends on what caused it:
- If it comes from the condition of the flat, for example an old pipe cracks, the owner's insurance usually pays.
- If the tenant causes it, for example by leaving the bath tap running, the tenant is liable. Your insurance may cover it, but the insurer can then claim the amount back from the tenant.
- If the water comes from the neighbour's flat, the neighbour's insurance pays.
For smaller damage caused by the tenant, the deposit also gives you cover.
When you claim, evidence matters
The insurer will ask what condition the flat was in before. Your answer: the dated handover photos.
Steps when damage happens:
- Stop the damage: turn off the water, cut the power if needed.
- Take photos: of the damage, its cause and the surroundings.
- Report it to the insurer within the deadline in the terms.
- Don't throw away damaged items until the loss adjuster has seen them.
- Keep the invoices for any urgent repairs.
FAQ
Is home insurance mandatory for a rented flat?
For a private flat, no law requires it, but it's worth it for most owners, especially for the liability cover. If there's a mortgage on the flat, the bank usually requires it.
Can I ask the tenant to take out insurance?
Yes, you can agree on this in the lease. The tenant's own contents and liability insurance is useful for both of you.
What if the tenant doesn't report damage in time?
If the delay made the damage worse, the tenant may be liable for the extra. That's why the lease should require faults to be reported immediately. If you're a tenant, here's how to report a fault.
Rentkey
For insurance tailored to rented flats, we work with Colonnade. You'll find the details on the Insurance page.
