Rent Guarantee Insurance is defined as a rent guarantee in a form of insurance where, for a relatively small annual fee, landlords can protect against loss of rent. Normally Landlord Rent Guarantee Insurance is combined with Legal Assistance Insurance whereby the landlord's legal costs of recovering rent and/or evicting a non-paying tenant are covered. Generally the insurance pay out only kicks in after one month.
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Use Rent Guarantee Insurance to Get Coverage
By Adam Labno
Property owners can protect themselves from defaulting tenants through rent guarantee insurance. The guarantee even provides coverage for eviction proceedings from the rented property if required. The landlords will gain much from such protection against non -payment of rents and eventual legal proceedings of eviction.
This insurance costs less than £10 monthly and provides protection for short term. If the tenant fails to pay rent then within 31 days of first default you can claim the money. The policy is normally paid after 14 days of default. For any clarification you can contact the consultant of the insurance company.
Some facts about rent insurance
o An insurance cover protects you from default payment and ensures steady income from the property. The policy gives a cover of £2,500 which is standard monthly rent.
o The policy premium has to be paid one-time for each tenancy agreement and it does not depend on the rent. If you have to take legal action against the tenant then the policy covers the cost of it also up to £50,000.
Things to keep in mind
1. The policy is usually for a period of 6 to 12 months.
2. The tenancy agreement must be a written one.
3. The tenant must be at least 18 years of age.
4. At the beginning, rent for first month and one month's rental fee as deposit must be taken.
5. Credit check of the tenant must be done.
6. The letting agent and the policy holder must possess two forms of recognition.
7. The tenant reference must be satisfactory otherwise the policy cover would not be applicable.
A rent guarantee assures the property owner undisrupted flow of income. The landlord will get his payment in time. It is advisable to get such protection if the landlord himself has financial obligations.
You may think of this insurance cover as a burden on your shoulder but actually it is a safety measure. For those landlords who live far away from their property this coverage is a must. These landlords won't be able to pay frequent visits to the rented property. Moreover if the tenant leaves without any information then the landlord will lose several months' rental income. The legal battle will also have to be fought at the landlord's expense. The cost of time and stress it would cause also should be considered.
In Summary
You may decide to get a cover based on certain facts.
o If your tenant has a past history of defaulting in payment then such cover is must.
o If you are not confident of handling such situations then you must get the cover.
o The credit check of the tenant may help you to decide. Even a good tenant may default in future.
o If your credit obligations are huge then to ensure a steady income you may get this cover.
You can get all necessary information from such guarantee providers. Get quotations from different companies and after comparing select the one that best suits your interests and ensure a steady flow of income.
Visit http://www.opuslettings.co.uk to get the most up-to-date information on rent guarantee insurance and how you can use it successfully to your best advantages.
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