It is an insurance product designed to protect you against tenants who default on rent payments, but it can also cover you for the costs involved in evicted a tenant from the rented property. Typically, the rent from the tenant pays for the costs associated with owning property such as mortgage, buildings insurance and others. Without adequate landlord rent guarantee insurance, would you be able to keep on top of these payments if a tenant defaulted?
If you do not have an adequate policy in place, you are running the risk of having to pay these costs yourself. You might have carried out screening and credit checks on your potentials tenants, and hopefully you will never have any issues with your new tenant. However, unfortunately, missed rental payments are an extremely common occurrence for landlords, even when you have tenants with the best intentions, and you can never predict who will miss rent, so ensure you are fully protected.
If you are landlord worrying about getting rent on time, rest assured with landlord rent guarantee insurance. This type of insurance allows you to sleep easy at night and protect your property without having to get a lettings agent involved.
One thing you should always check with the provider is that your insurance policy has immediate effect, meaning that if your tenant fails to pay the rent, there is instant protection in place.
What should landlord rent guarantee insurance cover?
• Legal cover for the costs involved in taking action against a tenant
• Cover for up to at least £1,000 in rent per month
• A flexible 6 or 12 month policy period
• Reasonable payment terms
Landlord rent guarantee insurance is a great and quite affordable way to minimise your risk as a landlord. It is particularly important to ensure you are protected if you only have the one property, or if your property is heavily mortgaged. Landlords with portfolios are still at risk, but are usually able to withstand a short period of non-payment. This insurance usually costs less than 5% of the monthly rental value, so make sure you are not a risk by investing in a quality insurance policy.