What is Rent Guarantee Insurance?
Rent Guarantee Insurance is designed to guarantee a Landlord’s rent if tenants fails to pay or refuses such as disputes. This is a product which can be purchased from a specialist landlord insurance broker.
What about Terms and Condition of rent guarantee?
There are fairly stringent terms and conditions when obtaining cover. These may include:
- Comprehensive Tenant Referencing before the agreement was signed.
- May not accept tenants in receipt of housing benefits.
- Some may accept a working guarantor.
- Usually a cap on the amount of rent recovered.
- The insurance must be purchased before the tenancy is signed, or you may not be able to claim within a certain period.
- There’s generally an excess to pay when making a claim which could be as much as 1 month’s rent and it can take time to receive your first payment.
- All correct notices must have been served at the beginning of the tenancy such Safety Certificates and How to Rent Guide.
- The cover will be provided until you take possession of the property or tenant has surrendered the keys.
- The policy usually includes solicitor fees when regaining possession.
- Costs as little as £50pm
If your property is mortgaged, and you are unable to pay the mortgage without receipt of rent, you may wish to consider a policy to lessen the risks and provide some protection.
It’s always advisable to have a few months worth of rent available to cover costs of mortgage, insurances and maintenance in the absence of rent payments.
