This week I’ve quoted and arranged Insurance for several landlords, for their Let Property Insurance. As a Property Insurance Broker, it’s my job to advise them on the covers they need and are available to them, and I’ve noticed there is a recurring confusion between Loss of Rent and Rent Guarantee Insurance, so thought I would post a note here to help landlords differentiate.
Loss of Rent Insurance
When you insure the building of your let property, you typically have the option to include Loss of Rent Insurance. In fact, sometimes you will be given this as standard.
The Loss of Rent Insurance will pay (up to certain limits and time scales) any rent lost as a result of (insured) damage to your building. For example, if a small fire rendered the property uninhabitable, the Loss of Rent cover would pay the rent you wouldn’t be receiving whilst nobody could live there.
Loss of Rent Insurance does not cover you if the tenants don’t pay.
Rent Guarantee Insurance
This is the cover that pays the rent (subject to certain limits and criteria) if your tenants stop paying the rent. Some Rent Guarantee Insurance policies also provide an element of Legal Expenses Insurance, to pay the cost of pursuing the tenants legally and/or evicting them.
Rent Guarantee Insurance does not cover rent lost as a result of damage to the premises.
If you are a landlord, it’s really important you consider all of your options in terms of Property Insurance.
Loss of Rent Insurance and rent Guarantee Insurance are two very different things, but are arguably as important as each other.
If you’re not certain what cover you have for your let property, we’re happy to give you a free review of your Property Insurance.