Many landlords have found themselves in a situation whereby their tenant cannot or will not pay their rent. This can create serious cash flow problems, especially for landlords will small portfolios. But many landlords mistakenly believe that their basic landlords building insurance will cover them for lost rent.
In most cases, however, this is not the case. Many policies only cover for loss of rental earnings following damage to the property in question, but do not insure against tenants falling into arrears.
Recent figures regarding tenants in arrears suggest that taking out a separate ‘rent guarantee insurance’ is prudent. The tenant arrears tracker from Templeton LPA, for example, puts the number of tenants in severe arrears at around 99,000 – the highest figure since the tracker began in 2008.
Additionally, 47 per cent of landlords have had to deal with rental arrears over the past 12 months, according to the most recent Landlord Panel from the National Landlord Association (NLA).
At Click4Quote we offer rent guarantee insurance to our landlords building insurance customers. This provides additional peace of mind, ensuring that landlords do not face a serious cash-flow crisis if a tenant does not pay.
This insurance cover usually only kicks in as long as long as you are pursuing to evict the tenant and chase them for monies owed, it is not designed to cover occasional missed payments by the tenant.