Landlords Rent Guarantee insurance (LRG) is specifically designed to cushion landlords from the financial effects of non-paying tenants and the associated legal costs with removing them from their rented accommodation.
The main call on this type of policy, especially over the last few years, has been due to changes in tenant circumstances changing and being unable to pay their rent. However, it can also advise landlords on their legal rights when dealing with non-paying tenants. If agreement cannot be reached in respect to repayment of arrears, then the policy provides cover to pursue the legal vacant possession of the property for the landlord, including bailiffs if necessary.
As the process can be long and challenging, the policy not only provides solicitors to act for the landlord but also provides cover for the rent arrears that may continue to rise as the legal process continues.
This is where Assurant’s new Rent Guarantee product is designed to reduce these financial risks to landlords providing up to a market leading £3000 per month for a period of up to twelve months for unpaid rent and up to £50,000 legal expenses insurance to advise landlords on their legal rights when dealing with non-paying tenants.
Rent Guarantee cover is particularly relevant to landlords as the impact of the current UK cost of living crisis is significantly increasing the risk of both property rental and mortgage payment defaults. The average rental cost in England and Wales is now at £1088 per month and rising, according to Rightmove, which will put pressure on tenants’ budgets and ability to pay. Property market rental statistics also demonstrate that recent and current experience is showing the eviction process is taking longer than normal and often in excess of 6 months so the benefit of the rent guarantee insurance helps give real peace of mind that the landlords financial standing should not be impacted to any great extent, if at all.
Although stringent tenant referencing checks are a vital part of setting up new tenancy agreements and do help reduce the risk of rent default, it is clear that landlords require a greater level of support as the impact of the pressures of the increased cost of living on average UK households has yet to fully materialise.
Assurant’s new policy has been developed in partnership with Lexelle Ltd, the leading wholesale insurance broker with whom we have had a 15 year relationship.
Sharon West, Managing Director of Lexelle commented “We are delighted to be able to continue our long standing partnership with Assurant with the launch of a new Rent Guarantee product which will provide Landlords with much needed cover”.
Richard Miles, Director of Assurant Intermediary added “Our new Rent Guarantee product offers comprehensive rent arrears cover at a competitive annual premium of £159.99. This is a product we have been keen to get back as an offering for some time and we are proud to be able to offer such a bespoke product to our intermediary partners and help make a real difference to landlords’ peace of mind”.