When purchasing landlord insurance there are many different options and extras you can add to your policy. Rent guarantee and legal expenses cover could prove to be a lifeline should the worst happen.
Rent Guarantee
Rent guarantee is designed to protect the landlord when a tenant refuses or cannot pay the rent. It can also provide income should the property become uninhabitable through flood or fire damage for example. If this happens it could be financially damaging, affecting your investment and your income.
Some policies offer to cover the tenant’s failure to pay rent by paying the rent out, up to a certain amount. Sometimes this is only for a certain period of time, 6 months for example, or only up to a certain amount of money.
Also be aware that some policies include an excess. This means they will only start paying out after a certain amount has been reached, for example £600 or one month’s rent.
If you have high risk tenants or heavily depend on your rental income it may be worth considering adding rent guarantee to your policy. Taking into account all these factors you need to carefully consider whether rent guarantee is for you.
Legal Expenses
As a landlord you have certain legal requirements that must be adhered to. Also you could be subject to a wider variety of claims and instances where you may need to seek legal advice. Some insurance policies offer landlord legal costs as a standard feature.
There are many opportunities where things can go wrong, from electrical faults to gas leaks, or water damage to vandalism and of course, a tenant's failure to pay rent. In any of these events you may need to contact a specialist legal representative to advise you on your options.
This can be very expensive, so it is worth considering adding legal cover to your policy. For example, they could help you recover rent arrears or pursue costs for damage to items within the property or the building itself.
Optional extras such as rent guarantee and legal expenses cover could prove to be invaluable and can help your property business stay afloat should the unexpected happen. While it does cost extra for the privilege, spending a few extra pounds could make all the difference.