What is Rent Guarantee Insurance?
Rent Guarantee Insurance is a policy which protects you from legal fees if you need to take your tenants to court and compensates you for rent and service charges owing to you which have not been paid to you.
But is it necessary?
Consider the following statistics: In 2012, a survey done by Templeton LPA revealed that 99,000 tenants across the country are defaulting on their rent – and this figure is getting worse not better. Similarly, according to the National Landlords Association, nearly half of all landlords have received their rentals late or not at all!
In short, if you rely on your rental income coming in every month, Landlord’s rent guarantee insurance is a must. But bear in mind that many landlord legal protection policies do not include rent guarantee protection so it is essential that you shop around for a policy that does include it.
What Does Rent Guarantee and Landlord’s Legal Protection Cover?
A good policy will cover the following incidents:
- Unpaid rent owing to you
- Cover for legal proceedings such as court orders for eviction
- Tenant’s negligence of the property causing damage to the property
- Non-payment of service charges by tenant and legal expenses for dispute
- Legal costs for rent debt recovery
A great policy will offer the following additional benefits:
- No excess or low excess for rent guarantee insurance (such as an amount equal to one month’s rent)
- Loss of salary for time off work to attend hearings
- A legal advice line
- A choice of a short term or annual policy