QUESTION 4:
I asked a broker for help finding me rent insurance and I’ve never heard of the company it is recommending. Meanwhile my house insurer says it has never heard of rent guarantee insurance. Is there some sort of scam going on?

ANSWER:
There’s no scam, but this sector of the insurance market can be confusing. Very few of the mainstream insurance companies can be bothered offering rental or other policies to property investors – the market is being led by their smaller and more flexible rivals. Some companies have actually been set up specifically to fill a gap in the market for good buy-to-let insurances. The good news is that these specialists should be tailoring their products to the specific demands of property investors. The bad news is that the small players can be hard to find. Getting a broker or other intermediary to shop around amongst the insurers can make sense and two big trade bodies can help you find a local expert. Try the British Insurance Brokers Association at www.biba.org.uk or the Institute of Insurance Brokers at www.iib-uk.com. If you find a company on your own it will pay to check them out before handing over any money. Firms need to be authorised to sell insurance and you should click on the Financial Services Authority’s Firm Checker facility at www.fsa.gov.uk to see if your firm has passed the relevant tests. If your broker suggests an unknown insurance company you can check its credentials by using the Member Search facility from the Association of British Insurers at www.abi.org.uk.