When your income is reliant on other people being able to pay their rent on time every month, one of the biggest nightmares for every landlord is having a tenant who is unable (or simply won’t) pay their rent.
While many landlords cover their property with home insurance, few will take the additional step of purchasing rent guarantee insurance for these situations.
Below, we’re going to take a look at exactly what rent guarantee insurance is – and whether you really need it as a landlord.
What is Rent Guarantee Insurance?
Landlords rent guarantee insurance protects you if your tenants fail to pay their rent or for service charges.
Some buildings insurance policies do cover you for missed rent, but this is only the event of an accident such as a fire or other damage to the property. If your tenant falls into debt or simply refuses to pay your rent, rent guarantee insurance is what you need to protect yourself.
What Does it Cover?
Rent guarantee insurance covers you for missed rent (this typically has to be at least one month)
Your policy will typically cover you for:
- Rent that your tenants have not paid
- Legal fees and expenses
- Expenses for accommodation etc while you try to repossess your property if needed
Do I Really Need It?
Rent guarantee insurance provides the peace of mind that should you be unlucky enough to have a tenant who cannot or will not pay their rent, you have the policy to protect your income.
Starting from £61.50 for six months worth of cover, rent guarantee insurance is not overly expensive for the protection it provides – and will be well worth the investment should you fail to receive your rent for several months.
What Else Can I Do If My Tenant Fails to Pay Their Rent?
Of course, your rent guarantee insurance is not a permanent solution – ideally, you want your tenant to either start paying their rent or to evict them and find a new tenant.
This process can be long-winded, not to mention expensive if you need to take them to court (which again, is where rent guarantee insurance is so useful with cover for your legal expenses).
Take a look at this guide to dealing with a tenant who has fallen into arrears for a better idea of how to handle this situation.
If you are a landlord and haven’t protected your income with rent guarantee insurance yet, get a quote for your rental property today – our policies are available in both 6 and 12-month duration and have zero excess or hidden fees: