Question 1

How does rent guarantee insurance work?

Accepted Answer

Rent Guarantee Insurance works as a type of landlord insurance which could cover your rental income should a tenant fail to pay their rent. Our policy also provides Legal Expenses cover, which will cover the costs associated with pursuing legal action against your tenants, or defending you if they decide to take legal action against you.

Question 2

What do I need to check before buying your Rent Guarantee Insurance?

Accepted Answer

For this insurance to be valid, your tenant(s) must have passed the relevant referencing process in advance of the tenancy commencing. This includes an affordability test, proof of earnings, proof of ID and credit referencing showing no CCJ’s in the past 3 years along with no previous bankruptcies and a good/satisfactory/pass credit score demonstrating their ability to meet their rent commitments. Further information can be found in the Policy Wording – which is available when you get a quote.

Question 3

Will I be covered for legal action against my tenant(s)?

Accepted Answer

We will pay for your legal costs, providing the reason for taking legal action against your tenant falls within the terms and scope of cover in our policy.

Question 4

Who underwrites your insurance?

Accepted Answer

Our Rent Guarantee Insurance policy is underwritten by Financial & Legal Insurance.

Question 5

Is this policy available for commercial property landlords?

Accepted Answer

No, our Rent Guarantee Insurance is only available to residential landlords.

Question 6

If my tenant(s) stop paying the rent, how long would it take to process a claim under the Rent Guarantee section of the policy?

Accepted Answer

There would need to be a minimum of either £500, or one month’s rent outstanding – whichever is the greater. You would need to be able to show that you have made reasonable attempts to get the tenant to pay. If that has failed, you could then submit a claim under the policy up to the value of the unpaid rent, which would be paid within a maximum of 17 days, assuming you have provided the claim’s handlers with all the documentation requested. At the same time, we would commence legal proceedings against the tenant to recoup the rent.

Question 7

Will my rent guarantee insurance policy still cover me if I change my tenant?

Accepted Answer

Yes, the insurance is based on the property. As long as the new tenant has passed our referencing criteria and there is a tenancy agreement in place, then the insurance will be valid.

Question 8

If the tenant is paying over £2,500 per month in rent, can I take out cover up to the maximum limit of £2,500?

Accepted Answer

No – unfortunately if the tenancy contract is covering rent of above £2,500 per month, we would not be able to offer you a policy.

Question 9

If part of the tenant’s income is coming from other income sources, can this still be classed as income?

Accepted Answer

We can accept income from any of the following sources: investments, pensions, private trust fund, or where the tenant is employed, additional income received from Universal Credit or Disability Living Allowance. We are not able to accept Child Benefit or Child Maintenance as forms of income.

Question 10

My tenant has been living in my property for many years. Do I still need to do all the credit checks in order for the policy to provide cover?

Accepted Answer

If your tenant has lived in your property for 3 or more years, and has paid their rent without any issues, you do not need to carry out the listed credit checks. However, in the event of a claim, you would need to be able to provide evidence that the tenant has consistently paid their rent for at least 3 years. If you have not carried out the relevant credit checks, and the tenant failed to pay rent within the first 90 days of the policy, the claim would be declined.