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.......Article > Getting the Right Rent Guarantee Insurance

 


Article kindly provided by

www.CriticalIllness.org.uk


Whether you are a landlord of just one property or you have a letting business, rent guarantee insurance could save you money if a tenant fails to pay their rent. However, with so many different policies to pay out for, is it really worth the money or should you risk being uninsured?

In today`s fragile economy nobody`s job is secure and even your tenants are at risk of redundancy. They may pay their rent on time every month whilst they are employed, however, if they suddenly become unemployed, they may have no choice but to miss their rent payments. When this happens you still have your mortgage to cover and if you had rent guarantee insurance this would be paid.

 

What Is Rent Guarantee Insurance?
Rent guarantee insurance covers two elements. The legal advice and expenses part will cover you for instructing lawyers to deal with the eviction process, as well as any breaches of the tenancy agreement or claims against yourself. The income protection element will help to pay the mortgage if the rent is not paid.

In order to qualify for a rent guarantee policy you will need to have a signed assured tenancy agreement, as well as proof that the deposit is held in a secure scheme. You will also need to have undertaken any legal obligations, including having gas and electricity safety inspections. Before your tenants take up their tenancy you should have them fully referenced, including credit, employer and previous landlord checks. If a rent guarantor is used they should also have references. You should be aware that some policies will not pay out if it was set up after the tenants were already in place.

When you set up the policy you should decide how much of the rent you need covered. It will be cheaper to simply have enough to cover the mortgage and the bills, rather than having the profit element covered as well. There will be an excess to pay if you use the policy, so you need to make sure that this is covered in the tenants deposit. You should also keep an eye on how long the term of the policy is for, as it may become void if the tenants move onto a rolling agreement.

How Does Rent Guarantee Insurance Work?
Your policy will start to pay out after the tenants have missed one month`s rent and you can then start the process of eviction. This will usually take around three months and tenants are unlikely to leave voluntarily before they have received the legal documents. However, under the terms of the policy you should continue to have the rent paid to cover the mortgage.

However, some policies may only pay out for a certain period of time or up to a maximum amount. They might also charge an excess, which is often the equivalent of one month`s rent. Rent guarantee insurance might not be for all landlords, but if you have high risk tenants or you really need the income it generates, then you should consider taking out a policy.

If you are also buying other policies, for example buildings and contents, some companies offer discounts for bundles. However, some insurance companies are better for one type of policy than for others, so which company is best for critical illness cover, might not be the best choice for rent guarantee insurance. As with all types of insurance policy, you need to shop around and do your research to make sure that you get the best deal.

 

CriticalIllness.org.uk help you get the right type and level of critical illness protection and get it at a great price from a reputable insurer by:


Paying Less - We compare the entire market, 100s of critical illness cover plans, to find you the best quote that suits your needs and budget. Saving Time - It takes 2 minutes to fill in our form; then you can relax while we do all the work for you. Big Insurers Panel - More than 20 leading UK insurers regulated by the Financial Services Authority quoted. Quotes Matching Your Needs - The specialized insurance advisors from our panel will help you find the best policy based on your specific needs and budget. Free, No Obligation Service - Our service is free and without any obligation. Free Knowledge - Our site offers a wealth of free information on critical illness insurance which helps you take informed decisions.

 

 

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