Property owners need to check out the small print in their insurance policies to make sure they are actually covered for all eventualities.

Somewhere in the schedule, the insurer will spell out that the policyholder must disclose any information that might affect the terms of the policy.

For plain speakers, this means the insurance company has the right not to pay out if the property investor has failed to tell the company about any changes that have occurred since the policy was taken out.

One of the most popular reasons for invalidating a policy was bringing in unqualified builders or carrying out DIY work.

This means check out any builder or tradesman has accidental damage and liability cover before they commence work.

The only way to be sure a builder has adequate cover is to get a copy of their policy and send the details to your insurer to confirm everything’s OK before work starts.

Starting work before clarifying insurance cover can invalidate building and contents insurance and any claim might be refused, for instance:

• Some policyholders failed to tell their insurers about work on their properties and have had claims refused for water damage caused while builders were replacing roof tiles and rain poured in during a storm.
• On the other hand, DIYers have damaged their homes by knocking out retaining walls or dropping hammers in the bath and had claims refused because their policies stipulate that competent, professional builders must complete certain work, like structural alterations.
• Some building work, like changing doors and windows may lead to an extra premium if your insurer feels the risk of a break-in is increased by the work, especially if this means a property is left open during building works.

Honesty is the best policy when dealing with an insurance firm, even if it means employing a more expensive builder or tradesman.

Insurance companies often refuse to pay out on claims where anyone who owns or lives in a buy to let property has not declared an unspent criminal conviction.

Landlords can unknowingly have their insurance claims rejected if a tenant has not told them about unspent convictions and property investors and councils are facing problems providing homes for ex-offenders.

In a recent case, insurers Aviva paid out £241,000 to a woman whose estranged husband burned down the former matrimonial home.

The money was spent on rebuilding the home, and two weeks before she was due to take the keys back, insurance investigators discovered she was fined £150 two year’s before for receiving an overpayment of housing benefit.

Aviva voided the policy and are now claiming the £241,000 back on the grounds they would not have granted the policy if they had originally known about the conviction.

The Rehabilitation of Offenders Act 1974 lays down the rules about when convictions become spent – which is effectively when an offender no longer has to tell anyone about the court case.

The process is similar to getting points on a driving licence – they are plain to see for a set period depending on the offence and are then removed when the period is over.

The more serious the crime, the longer the unspent period lasts. The minimum unspent period is six months.

The problem for landlords is dealing with their own convictions is one thing, but asking tenants and their families to disclose their convictions is another.

The convictions do not have to relate to a tenancy – shoplifting and drink driving are two offences that are committed most often and ones that should be disclosed to an insurer.

Any landlord offering accommodation to ex-offenders should also review insurance policies to make sure they actually do provide the cover that is being paid for.

The issue also affects insurance brokers, letting agents and other property businesses that sell landlord and tenant insurances on commission without fully explaining the consequences.

Landlords claiming against rental guarantee insurance because tenants are in arrears shot up by 58% in the second half of 2009, landlord and tenant insurer Endsleigh has disclosed.

The rise in arrears is blamed on tenants getting in to financial difficulties mainly due to the credit crisis.

By contrast, the financial security of new tenants applying for lettings contracts increased in 2009, said Endsleigh, which also offers a tenant referencing service. Its figures showed that the proportion of declined tenant references fell by 9 percentage points in the second half of last year.

The most common reasons for declined tenant references in the second half of 2009 were “insufficient income to cover rent”, which accounted for 25pc of the applications turned down, and “detrimental information registered against the applicant”, such as court judgements, bankruptcies and loan consolidations (23%), the company said.

Carlos Thompson of Endsleigh said in the Daily Telegraph: “The increase in landlords and lettings agents suffering defaulting tenants is a big problem in the industry at the moment.

“It is likely that many of these tenancies were taken up several years ago before the recession took effect, and what we’re seeing now is that people’s financial situations have changed and they are finding themselves struggling to meet payments that they were previously comfortable with.”

“The reduction in declined tenant references last year shows that tenants are looking to rent properties that are more realistically matched to their means, rather than stretching themselves financially during these uncertain economic times.

“With the increase in unpaid rent, we are seeing more letting agents and landlords looking to adequately reference their prospective tenants so that they may then guarantee the rental income against default.”

Specialist buy to let insurer Leaseguard has a fresh look online with a new web site.

The revamped look is aimed at giving landlords easier access to information about products and services – including tenant credit referencing and rent guarantee.

The web site is at leaseguard.co.uk.