12 September 2014

The Comprehensive Guide To Rent Guarantee Insurance

Rental agreement While the number of British households currently in rent arrears is down from last year’s figures, 68,000 landlords across the nation are still facing missed payments. If you’re a landlord and rely on rent to pay off a mortgage or cover other essential expenses, this can be a dire situation to be in. As such, rent loss insurance has emerged as a popular choice for an increasing number of landlords who can’t afford to miss out on any rental payments. To give you a better understanding of the concept, we’ve put together this brief overview covering everything you need to know about rent guarantee insurance

What is rent guarantee insurance?

In simple terms, rent guarantee insurance is a compensation scheme taken out by landlords who want to cover themselves in the case of non-payment by tenants. The scheme is offered by insurance policy providers with terms and conditions varying from company to company.

Why is it useful?

If you rely on rental payments to cover expenses such as a mortgage or credit card payments, rent guarantee insurance can mean the difference between keeping your head above the water or falling into debt when you have to cover the expenses out of your own pocket.

When can pay-out be claimed?

Terms and conditions vary between policies however in general, rent guarantee insurance pay-outs will be issued when a tenant fails to pay a scheduled rental payment.

How much is paid?

When you take out a rent guarantee insurance policy, a pre-set amount will usually be agreed with the provider. Keep in mind that the monetary value of the pay-out may not necessarily equate to the exact value of your rental income as expenses such as utility bills, TV licence and Wi-Fi will be deducted.

How long is a rent guarantee insurance policy?

In general, rent guarantee insurance policies are offered in 12, 24 or 36 month periods.

How much does it cost?

Like all policies, rent guarantee insurance prices vary between providers. If you’re looking for the best value policy, the clever thing to do is visit a trusted quote compare site such as Peacock Insurance.  With access to a comprehensive database of online policies from all the leading providers, Peacock will help you locate the right rent guarantee insurance policy for you at an unbeatable price.

Is it worth the investment?

At the end of the day, taking out rent guarantee insurance really depends on your individual circumstances and what the consequences of missed rental payments will be for your personal finances. If you rely heavily on rent to cover expenses such as a mortgage, rent guarantee insurance could be extremely useful. If you consider rent as disposable income, you may not be as concerned with taking out a policy.