As a residential landlord you will always face the risk of your tenant defaulting on their rental payments. Although you might carry out a credit check and request references from previous landlords, there is always the chance that your tenant may not be able to make a payment. It is important to think about whether you would be able to cover your monthly outgoings in the event that you don’t receive any income.
The current financial climate has led to everyone feeling the pinch, this could mean that your tenants may struggle to meet their financial obligations. Trying to recover rental arrears can be time consuming and costly with no real guarantee of ever obtaining the outstanding money.
Should your tenant fail to pay rent, landlords rent guarantee insurance will protect your income up to a maximum amount and for a maximum period of time – often up to 6 months’ of arrears. There will be some conditions to the policy, for example, it may be a requirement that your tenants are professionally credit checked before signing an agreement.
Landlords rent guarantee insurance doesn’t only cover the value of the missed rental payment, it can also help the landlord take legal action against the tenant. Legal expenses and the cost of evicting tenants can mount up, and can actually prevent landlords without any insurance from chasing up outstanding balances.
If you already have property insurance it might be worthwhile finding out if you already have landlords rent guarantee insurance. This cover isn’t often included as standard, but it can be added to other policies as an additional extra. Adding the cover to an existing policy may be cheaper than finding an alternative with a new insurer, so why not contact your provider for a quote before shopping around elsewhere?
In the event that you don’t have an existing landlords insurance policy, visit one of the many online price comparison websites to find a provider who can offer you insurance at a great price. Landlords rent guarantee insurance premiums should not be too expensive, and can protect you against significant financial loss.