Why choose Howden for Rent Guarantee Insurance?
Howden is the new name for A-Plan. As a broker which specialises in landlord insurance, we pride ourselves on doing the heavy lifting, so you don’t have to. Thanks to the great relationships we have with our selected panel of standard and specialist insurers, we make the process of comparing various rent guarantee insurance policies, on your behalf, simple and straightforward. What’s not to like?
Here at Howden, our team knows that each landlord policy needs to be as individual as its owner and their property portfolio, and that’s why we provide a personalised service, focused on getting to know you and finding out exactly what you want from your insurance.
Ultimately, whether you need to make a claim, purchase a new policy, or renew an existing one, just know that we’re here to help.
Benefits of working with Howden:
- You can trust us – we’re rated Excellent on Trustpilot.
- We’re driven to save you time, money, and hassle.
- Benefit from a tailored service that comparison sites can’t provide.
- Speak with your local branch, within your community.
- We’re right by your side in the event of a claim.
What is rent guarantee insurance?
Often offered as a policy add-on, rent guarantee insurance falls under the category of landlord insurance and is designed to provide coverage for your rental income in cases where your tenants face difficulties in meeting their rent obligations.
Financial hardships can affect even the most dependable tenants, potentially leading to rent arrears. Eviction processes can be lengthy too, taking up to six months, during which a significant amount of rental income can be forfeited.
Is Rent Guarantee Insurance worth it?
Rent guarantee insurance protects landlords against the risk of tenants not paying rent and can provide a sense of security for those who rely on rental income to cover their mortgage or other expenses.
Whether rent guarantee insurance is worth it or not depends on several factors, but mainly on how heavily you rely on rental income to cover your own expenses, how reliable your tenants are when it comes to paying their rent on time (do they have a history of on-time payments?), and whether the length of the rental agreement you have justifies the backing of an insurance policy. The answers to these questions will help you determine whether rent guarantee insurance is necessary for you.
However, knowing generally what’s covered under a rent guarantee insurance policy would also be helpful. Policies can vary depending on the provider, but most rent guarantee policies will cover:
- Unpaid rent up to a pre-determined amount for a period of up to one year.
- Legal advice if it’s required.
- Legal expenses if the case goes to court. Legal expenses cover will vary between providers and the level of cover you purchase.
As long as one or more tenants have defaulted on their rent by not paying for at least one month, most insurance providers will offer you their rent guarantee policy.
The best advice we can offer to you, is that you get the right advice, because rent guarantee insurance can be complex and widely varied across the market. That’s where we can help. Speak to our team of specialists and we can advise on which rent guarantee policies could work best for you.
How does rent guarantee insurance work?
The way rent guarantee insurance works is pretty straightforward. In the event that your tenants cannot or do not pay what they owe in rental, rent guarantee insurance does what it says on the tin, and covers the monthly rental income you’re owed. It does differ from loss of rent coverage, which exclusively provides compensation when you cannot lease your property due to damages covered by your landlord building insurance, such as fire damage.
Generally, you can initiate a claim under your rent guarantee policy once your tenants have missed one month's rent. Subsequently, your insurance will proceed to provide compensation for a predefined duration, typically spanning 6 to 12 months.
It's important to remember though, that while certain landlord policies may encompass this protection, it's typically an additional feature that requires an extra fee.
How much is rent guarantee insurance?
Every landlord is different, and it’s those differences across landlords that ensures that not one rent guarantee insurance policy or premium is the same. That’s why it’s almost impossible for us to predict exactly how much your rent guarantee insurance will cost, especially before we have even been in touch with you!
What we can tell you though are the various factors that can cause your insurance premium to vary. These are:
- Location: Insurance rates may vary by geographic regium
- Rental Income: The amount of monthly rental income you want to protect with the insurance can influence the cost.
- Deductible: Choosing a higher deductible can lead to lower premiums.
- Insurance Provider: Different insurance companies may offer varying rates for rent guarantee insurance.
- Claim History: If you have a history of previous tenant defaults, it may impact your eligibility and the cost of coverage.
- Additional Coverage: The inclusion of additional coverage, such as legal expenses cover, can influence the premium.
- Number of Properties: If you have multiple rental properties and wish to insure them all, you may be eligible for multi-property discounts from some insurers.
To determine the exact cost of rent guarantee insurance for your specific situation, we recommended that you request a quote from an insurance specialist or broker, such as Howden. We can consider your unique circumstances, compare quotes from multiple insurers and then provide a premium based on the level of coverage you need.
Related articles and guides about Rent Guarantee Insurance
Take a look at our rent guarantee insurance articles and guides...
Does landlord insurance cover the loss of rent?
The inclusion of loss of rent coverage in your landlord insurance depends on your chosen policy type and the cause of the rent loss. Some insurance policies will reimburse you for lost rent when your tenants are forced to vacate your property due to a calamity, such as a fire or flood, provided that the calamity is a covered event according to your landlord insurance.
Loss of rent coverage is typically not a standard feature in landlord insurance; you often need to select and add it to your policy during purchase. In scenarios where rent is lost for reasons other than a covered disaster (e.g., non-payment by tenants), you are generally eligible for compensation only if you have a specialized coverage, like tenant default insurance, incorporated into your policy.
Do you need separate rent guarantee insurance to landlord insurance?
Whether you can get these two types of policies under one landlord insurance package will depend on the insurance provider you request quotes from.
While these policies are separate, they are often used together by landlords to comprehensively protect their investments. Many insurance providers offer both landlord insurance and rent guarantee insurance, and you can purchase them as separate policies or as part of a landlord insurance package. Combining them can provide a more comprehensive safety net, covering both property-related and rental income-related risks.