If you are a landlord letting a residential property, then you are at risk of rent default by your tenant. Even if you have had the best checks and references carried out, you can never predict a tenant falling on hard times. Or they might lose their job or become ill and not be able to pay the rent.
Would you be in a position to cover your expenditure and costs over a period of time if this happened to you?
Do you need Rent Guarantee Insurance?
In the current economic climate, many landlords are finding their rent default rates increasing, as many tenants struggle with unemployment, lower salaries, and increased bills. Rent Guarantee Insurance will cover you against your residential tenant defaulting or failing to pay the rent. And it certainly takes away some of the stress associated with being a landlord.
By purchasing rent guarantee insurance and you get peace of mind. Most rent guarantee insurance policies also come with legal expenses as standard, so you can get rent protection in the event of a tenant defaulting and also get legal expenses paid, such as costs for evicting a tenant would be covered.
This type of insurance covers:
- Missed Rental Payments.
- Continued cover when you obtain vacant possession.
- Most insurance companies cover Legal & Claim costs as standard.
Many rent guarantee insurance policies insist the tenants have either appropriate references or a guarantor. Appropriate references might include written references from a previous managing agent or landlord, employer references and a credit check.
It’s important to make sure you comply with reference demands. If not, the insurer could refuse to payout and the policy would be wasted. Your insurer might also insist on a particular type of tenancy agreement. They may also require protection of the tenant’s deposit under one of the government’s approved tenancy deposit schemes.
Getting into a legal dispute with your tenant, perhaps over eviction, rent collection, or damage to the property, it can prove costly and time-consuming. Legal expenses insurance can, therefore, prove a welcome addition to your insurance armoury as it will help to fund your legal costs.
You may find your rent guarantee insurance already includes legal expenses cover. However, you can also buy it as a separate policy if required. There is usually a limit to the amount you can claim under legal expenses cover. So do check the details with your insurer. You might also find that you can only employ a solicitor from the insurer’s chosen panel of firms.