Are you a landlord, you make good rents, but if one day your tenants stop paying their monthly rent? That’s a big problem for you. You probably heard about insurance and you asked yourself “What is rent guarantee insurance?” In this article, we will answer this question.
Rent guarantee is a form of insurance where, for a relatively small annual fee, landlords can protect against loss of rent. This product was traditionally offered in the UK and has now expanded to the USA through some insurance firms.
In the United Kingdom, all companies underwriting such policies must be registered by the Financial Services Authority.
Rent Guarantee Insurance protects you if the tenant does not pay his monthly rent for various reasons.
You should think about getting rent guarantee insurance if:
- You are letting your property to the new tenants
- If you pay a loan from your rent
- If it’s your only one income
- If the tenant does not have a stable job
Landlord rent guarantee insurance conditions
In order to purchase a Rent Guarantee Insurance, you must have a rental agreement in place and your tenants must be referenced. If a tenant fails referencing, then RGI may still be available if they can provide a qualified guarantor.
Tenant referencing is an essential part of the letting process, giving you, as a landlord, the reassurance that your tenants are who they say they are, work and are able to make rental payments without difficulty.
How does rent guarantee insurance work?
In simple terms, rent guarantee insurance is designed to guarantee the landlord’s rent in situations where the tenant cannot afford to pay the rent, or in cases where they refuse outright to pay rent for whatever reason such as disputes.
Rent guarantee insurance covers landlords in these events, is a peace of mind cover that protects a landlord’s rental income from a loss of rent.
Love Your Postcode™ Group can effectively become your tenant, guaranteeing you a fixed rental income. We then sub-let the property, taking great care to select the right tenants and then manage the property throughout the full duration of the tenancy – leaving you to get on with your busy life.