Rent guarantee insurance

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    Rent guarantee insurance

    Hi there,

    As well as being a landlord, I'm also a journalist and I'm writing an article about rent guarantee insurance - it's essentially a guide to what it is, whether landlords should get it and what to watch out for in the fine print. It's for a personal finance magazine.

    I'm looking for someone who has had it and had to claim on it to feature in the article. It could be either that the insurer paid out, or that they didn't pay out due to some issue with validity.

    Please email me if you'd be willing to speak to me about your experience on joanne.e.christie@gmail.com

    I'm also interested in any comments landlords have on the insurance - personally I have it and had to claim on it once so I think it's useful but not sure what the experience of other landlords is?

    Thanks,

    Joanne

    #2
    The general principle of all insurance is:

    If you have to get it by law or by contract then you get it (A car licence disk, or a freeholder insuring a building are examples)

    If you don't have to then there are only ever two reasons to insure:

    a) The consequences of an insured event will be so great that something really terrible will happen. It doesn't matter here whether the odds are really in favour of the insurer. Because it is really bad life-changing stuff.
    - Your kids won't be able to eat
    - You will likely die
    - You will be murdered by a hit squad

    b) You think the insurer has their calculation of risk wrong, AND you trust them to actually pay out.
    This is very very rare. Insurer's don't get it wrong. Otherwise they are pretty poor businessmen.

    If (a) applies then you really should not be a landlord. The problem is that people do stupid things because they think insurance will cover them if they do so (select tenants stupidly, don't act in a landlordly manner, don't chase arrears or tenant problems properly).

    I cannot see any logical reason to get RG insurance. You might as well insure yourself, make the same money the insurer will be making (on average) and you will be a more honest and predictable broker.

    And apart from that, insurers are not always honest and loophole free. So if you are relying on it (a applies) then you are more the fool.

    Comment


      #3
      Some BTL landlords are living close to the limit of their total income and can sleep better if they have RG insurance.

      If you rely on your letting agent to find your tenant and your letting agent carries out credit checks on prospective tenant before accepting the tenant, the risk of rental default should be very small.

      Comment


        #4
        What AndrewDod said..
        I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

        Comment


          #5
          Originally posted by Gordon999 View Post

          If you rely on your letting agent to find your tenant and your letting agent carries out credit checks on prospective tenant before accepting the tenant, the risk of rental default should be very small.
          Wouldnt it be worth paying the £100 odd to safe guard against tenants not paying rent ?

          Comment


            #6
            It seems you have a BTL, and you worry that your tenant may not pay the rent.

            Yes , its worth paying £100 to remove that worry from your mind.

            Comment

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