Can you afford not to have Rent Guarantee Insurance

Renting out a property can be a great investment, but unexpected tenant issues can throw a wrench in your plans. One way to protect your rental income is with Rent Guarantee Insurance.

In this article, HomeLet breaks down the typical costs of this type of cover and explores the potential consequences of not investing in a policy.

Rent Guarantee cover acts as a safety net for landlords in case their tenants stop paying rent. 

If your tenant falls behind on rent, withholds payments due to a dispute, or refuses to leave after an eviction notice, this insurance will cover your rental income in full for up to 12 months or up to vacant possession.

HomeLet policies cover legal expenses associated with evicting a non-paying tenant up to a maximum of £50,000.

Our insurance provides cover for a limited period after eviction to compensate you for lost rent while you find a new tenant. Landlords also gain the support of our in-house Claims team and on-site legal professionals.

Here are some of the worst-case scenarios you could face as a landlord if you skip Rent Guarantee Insurance:

Financial strain

Missed rent payments can significantly disrupt your cash flow. As a landlord, you'll still be responsible for mortgage payments, taxes, maintenance costs, and other expenses even if your tenant isn't paying.

This can quickly drain your savings and impact your ability to cover other bills. Rent Guarantee can mitigate these costs.

Lengthy eviction process

Evicting a non-paying tenant can be a lengthy and expensive process, especially if they contest the eviction. Court proceedings and legal fees can add up quickly.

Rent Guarantee from HomeLet not only provides up to £50,000 of financial support to cover eviction costs but it also ensures you have access to legal support when you need it.

Lost rental income

Even after a successful eviction, it can take time to find a new tenant. Without cover, you will inevitably lose rental income during this vacancy period, further impacting your finances.

However, our tailored policies provide cover for half of the rent for up to three months after vacant possession, until the property is re-let.

Difficulty finding new tenants

A history of eviction issues with a previous tenant can make it harder to attract reliable tenants in the future. These scenarios can have a domino effect, creating a significant financial burden and causing stress for landlords.

Rent Guarantee Insurance can act as a buffer, protecting you from these potential losses and providing reassurance.

Tenant damage

In the worst-case scenario, a tenant who isn't paying rent might also neglect the property. This can lead to costly damages that you'll be responsible for repairing.

In this case, it pays to have adequate Landlord Insurance in place as well to ensure you’re covered for both rental arrears and any damage to your building and contents.

HomeLet is a well-established player in the UK letting industry, known for our expertise in providing specialised insurance solutions for landlords. As such, our policies come with the added benefits of security and trust.

Not only do we provide a user-friendly system for making claims in case of rent arrears but we also have the experience and resources to assist with the eviction process beyond just covering legal fees.

Mike Dawson, Head of Sales at HomeLet said: “Although some landlords might view Rent Guarantee Insurance as an added expense that they could do without in the current climate, it’s actually an invaluable layer of protection – now more than ever.

“With household budgets stretched to the limits, even the most reliable tenants can fall into arrears through no fault of their own at the moment. Therefore, it’s vital for landlords to safeguard their business interests.

“Landlords are also struggling with overheads and the private rented sector is especially volatile right now. The best way to mitigate the worst-case scenario of a tenant defaulting or requiring eviction is to invest in Rent Guarantee Insurance. In an uncertain financial environment, this type of policy provides a degree of much-needed certainty.”

For more information about our Landlord Rent Guarantee Insurance, contact us on 0800 035 8258 or request a callback. Our offices are open 8:30 to 17:30 Monday to Friday and 9:30 to 13:00 Saturdays.