Rent Guarantee Insurance |  | |||
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Rent Guarantee Insurance
This type of Insurance cover, should not be confused with Loss of Rent Insurance cover which usually forms an integral part of a standard insurance policy wording. Loss of Rent Insurance covered under a standard letting insurance policy will normally provide a payout if the landlord cannot obtain a rental income following an insured event taking place at the property. Thus a Fire at the building, which renders it uninhabitable for three months, will result in a loss of rental income for the landlord, which he can claim back from his property letting insurance policy.
Guarantees cover provides a payout to the Landlord if the tenant does not pay his rent and the landlord is unable to recover it. This type of cover is usually coupled with a Legal Expenses policy and in the event of a potential claim, solicitors will be appointed to recover the debt. A number of contracts can be purchased; some are rated on the actual amount of rent to be covered. Others just specify a maximum amount of rent per month that can be covered. It is important to read the policy wording carefully before buying this type of cover.The most important factor is that the Guarantee is consequent on the landlord obtaining a suitable credit reference for the tenant. Without this any claim would be void. Also, there may be policy excess and the insurers may only cover a maximum of 6 months rent. Check Key facts documents carefully so you know exactly the scope of the cover you are buying.