With the cost of living crisis leaving many tenants feeling
squeezed, now could be the right time for landlords to invest in rent
protection insurance. But is it really worth it, or just another expense?
In this two-minute read, we look at rent protection insurance in
detail to help you decide whether you need it.
What is it?
Rent protection is also known as rent guarantee insurance or
landlord rent insurance.
It protects landlords against loss of rental income if a tenant
is unable to pay.
Where a tenant continually defaults, the eviction process can
take a long time, meaning you’re without rental income until you can resolve
the situation. Rent protection insurance covers losses for up to 12 months; it
also includes legal expenses which you may incur during the eviction process.
As with any insurance policy, there are lots of conditions and
restrictions on what and when you can claim, so make sure you know exactly what
you’re paying for.
How much does it cost?
This depends on factors such as size and location of the
property, type of property, the tenants you’re renting to, rental amount and so
on. It’s best to shop around, and most insurance comparison sites will provide
multiple quotes.
Rent protection insurance is tax deductible.
Many letting agents offer rent protection insurance to their
landlords as part of their fees, which saves you the time and hassle of looking
for an individual policy.
Why is it a good idea?
Many landlords need their monthly rent to cover mortgage
payments, so not having cover could prove a big risk in the long run. Some
policies also cover short periods of vacant possession.
If you have landlord insurance (buildings, contents and so on),
you may be able to add rent protection to the policy. Make sure you speak to
your provider to see what they offer. And, if you own multiple properties, you
may be able to arrange a single policy to cover them all.
Are you a landlord in need of a trustworthy and reliable letting
agent? At Ridgewater Sales and Lettings,
we’ve got you covered. Give us a call on 01803 313 577 to see how we
can help.
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