Landlord
Being a landlord can be stressful, especially when your property is empty. If there were no tenants in your property for an extended period of time, you might be worried about how you’re going to pay the mortgage and other bills associated with the property. It’s those worries that mean many landlords buy landlord guarantee insurance.
There are many reasons why a tenant may not be able to pay their rent. These include:
-The tenant is unable to pay due to health issues
-The tenant loses their job
-The tenant is behind on payments because they have been working overtime and haven't been able to work enough hours
-The tenant's hours have been cut by their employer
These are just some of the most common reasons why tenants might fail to pay their rent.
As a landlord or tenant, there are a number of insurance options that can help protect your finances and are considered essential by many. In this guide we look at landlord rent guarantee insurance, how it works and how it could help protect you financially if things go wrong with a tenancy agreement.
What is Landlord Rent Guarantee Insurance in the UK?
Landlord rent guarantee insurance' is a type of insurance policy taken out by landlords to protect their rental income. It normally covers the landlord if a tenant fails to pay the rent or breaks the terms of the tenancy agreement. Many people choose to take out this kind of policy, as it provides reassurance that they will not lose money in the event of missing rent payments or damage to their property by tenants.
What does landlord rent guarantee insurance in the UK cover?
Landlord rent guarantee insurance in the UK covers both accidental damage to your rental property and malicious damage by a tenant, as well as alternative accommodation costs. It also covers any legal expenses you incur as a result of having to evict a tenant (sometimes called legal expenses insurance).
Rent default is covered if a tenant stops paying, moves out early, or fails to pay their utility bills—but remember that this type of coverage will not pay for a tenant's legal fees if they sue you. You'll need additional coverage for that.
Landlord rent guarantee insurance can provide a number of useful benefits to tenants. These include:
- Eviction costs
- Legal expenses associated with evicting a tenant who has stopped paying their rent
- Temporary housing for an affected tenant if they need to move out until their new tenancy agreement takes effect
- The loss of rental income if your property is left unoccupied for more than 30 days in any year
- A lump sum payment to cover the cost of repairing damage caused by a tenant's negligence (such as malicious damage) or theft. This can be used towards replacing items that have been stolen, fixing broken windows, etc.
- Provides financial security by protecting you from a breach of contract by tenants and loss of income
There are two main benefits that come out of having a landlord rent guarantee insurance policy:
- You don't have to worry about losing money if your tenant doesn't pay you. The insurance will pay back any missed payments and cover any fees associated with evicting them, so you get what you're owed one way or another.
- You don't have to go through the stress and hassle of having to take legal action against your tenant yourself—the insurance company will take care of it for you!
When you have landlord rent guarantee insurance, you're protected from that eventuality. You can even use it as part of your sales pitch: "Hey, I have this great coverage that protects me if something happens to your income." That way, you can take the risk out of renting for both parties.
The cost of landlord insurance depends on the location and size of the property, and the amount of coverage needed. Exact coverage and payment terms will vary based on the policy chosen, but many of these plans offer premium-free months for new customers, or additional coverage for a small fee.
Who needs landlord rent guarantee insurance?
Basically, anyone who owns rental property could benefit from this type of insurance. If you own rental property, then you've probably had a tenant who either forgot or refused to pay their rent at one point or another. Landlord rent guarantee insurance covers the cost of your lost income from those situations, so it's a good idea for anyone who owns rental property.
Bluestone Properties is a property agency based in South West London. For property services needs feel free to contact us on 0208 355 3405. We offer a wide range of services including property management, letting agency and residental property services.
