Insuring a second home occupied by a relative
Insuring a second home occupied by a relative
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JNW1

Original Poster:

8,772 posts

210 months

Wednesday 6th August
quotequote all
Apologies if this is the wrong section of the forum to ask this question but it seemed as suitable as any!

Anyway, I own the bungalow which is occupied by my mum and the buildings and contents insurance is up for renewal shortly. The current situation is for simplicity she pays both but in order to do that she's saying she's the homeowner and that's not correct as I am; therefore, to regularise the position I think I ought probably to do the buildings insurance and she just does the contents. My concern with continuing as we are is if something goes wrong that causes lots of damage - such as a fire, for instance - an insurer might refuse the claim on the basis my mum had said she was the homeowner when she wasn't. Is that a valid concern or am I worrying unnecessarily?

However, when I go to the various insurance websites to do buildings only cover they (perhaps understandably) point me towards a landlords policy and as part of that there seems to be an expectation that there'll be a tenancy agreement in place. But there isn't as it's my mum and I don't charge any rent or have formal tenancy agreement!

So any advice on how best to handle this? I'm thinking a simple tenancy agreement to enable me to tick that box on an application for landlord's insurance might be the best solution but any other thoughts?

md_ph

383 posts

120 months

Wednesday 6th August
quotequote all
Be a joint policy holder?

Jon39

13,892 posts

159 months

Wednesday 6th August
quotequote all

Just in case this might be applicable to your circumstances.

If a parent gifts a home to their child, but continues to live in the residence, the parent needs to pay a commercial level rent, otherwise HMRC will consider the transaction to be a gift with reservation.

ie. the value is added to the parent's estate.

JNW1

Original Poster:

8,772 posts

210 months

Wednesday 6th August
quotequote all
Jon39 said:

Just in case this might be applicable to your circumstances.

If a parent gifts a home to their child, but continues to live in the residence, the parent needs to pay a commercial level rent, otherwise HMRC will consider the transaction to be a gift with reservation.

ie. the value is added to the parent's estate.
Thanks but that's not the case here!

Mark V GTD

2,684 posts

140 months

Wednesday 6th August
quotequote all
Has a similar problem years ago but solved it by using Aviva. You only need to declare to them that the property is owned, rented or mortgaged and that’s largely it.

JNW1

Original Poster:

8,772 posts

210 months

Wednesday 6th August
quotequote all
Mark V GTD said:
Has a similar problem years ago but solved it by using Aviva. You only need to declare to them that the property is owned, rented or mortgaged and that’s largely it.
Thanks, I'll give them a try!

Armitage.Shanks

2,766 posts

101 months

Wednesday 6th August
quotequote all
I'm in exactly the same position as the OP but in my case the mother in law lives in the bungalow I own. I eventually went for joint named policy for buildings but in my mind it's not right given I don't live there.

Every other approach took me to Landlord insurance, vastly more expensive and not applicable given no rent is charged nor is there a tenancy agreement.

Does Aviva cover a property owner not residing a the insured address but it's occupied by somebody else?

Mark V GTD

2,684 posts

140 months

Thursday 7th August
quotequote all
When I used Aviva in 2017 they had simplified questions following a TV ad campaign. Hopefully it’s the same now.

Instead of asking your relationship to the property or property owner they simply ask you if it is an owned, mortgaged or rented property (not interested in who is doing the lending renting or owning).

Update - to be clear - I was the occupier and the owner did not live at the property. There was no tenancy agreement and I wanted insurance in my name.

Edited by Mark V GTD on Thursday 7th August 07:58

davek_964

10,280 posts

191 months

Thursday 7th August
quotequote all
My step daughter lives in my house essentially rent free. We used a (popcorn) tenancy agreement with an annual rent of £1.
Hence no problem with landlord insurance for buildings etc because we do have the necessary paperwork.

Armitage.Shanks

2,766 posts

101 months

davek_964 said:
My step daughter lives in my house essentially rent free. We used a (popcorn) tenancy agreement with an annual rent of £1.
Hence no problem with landlord insurance for buildings etc because we do have the necessary paperwork.
Except landlord insurance is often twice the price of domestic insurance. All I want to insure is the building I own, the mother in law is not interested in insuring the (her) contents.

It would be easiest to have her take out the buildings (and contents if she wants) insurance in her name but she doesn't own it.

TwigtheWonderkid

46,537 posts

166 months

Tuesday
quotequote all
JNW1 said:
My concern with continuing as we are is if something goes wrong that causes lots of damage - such as a fire, for instance - an insurer might refuse the claim on the basis my mum had said she was the homeowner when she wasn't. Is that a valid concern or am I worrying unnecessarily?
It's more than valid. There must be stats showing tenants take less care of the property than owners. Hence landlord insurance being more expensive than "normal" insurance where the home owner lives in the home.

Obviously that's less likely to be the case where your parent of child is the tenant, but I don't think they do a policy for landlords renting to close family members, at a lower price.

It's such a valid concern, that I would guess that your existing policy is invalid.

Mark V GTD

2,684 posts

140 months

Tuesday
quotequote all
JNW1 said:
Thanks, I'll give them a try!
So how did you get on? Still the same - no detailed questions and just wanting to know if its an owned, mortgaged or rented property?