How does referencing affect insurance?

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  • How does referencing affect insurance?

    I'm fairly new to being a landlord.

    I have a couple who would like to rent my property. She is currently a student living in France but has a paid internship in the UK starting around the same time as the tenancy, for 6 months, at the same company where her boyfriend is employed. She is hoping this will turn into a full time contract. She has failed referencing (via OpenRent / RentGuard) as she cannot meet 50% of the rent.

    He has passed the referencing check, with the RentGuard recommended rental limit for him being ~£400 short of the total combined rent. Her limit was ~£500 but as they are not currently living together and in the UK RentGuard has told me her limit needs to meet 50% which is does not. I have started down the route of referencing a guarantor, which is his sister, as I was told it needed to be someone in the UK. The sister is currently in hospital having had some complications after giving birth so currently unable to supply details for the referencing.

    RentGuard have said she would need a guarantor in order for me to take out rent cover. I would want to take out rent cover.

    So my questions are:
    1) Is this 50% limit common across insurers?
    2) Should I wait and insist the sister pass referencing? He seems like a nice, genuine young guy.
    3) Could anyone recommend a good insurance company? I've had a look at the suppliers directory on this site, but any personal experience would be appreciated as I haven't dealt with any of them before.
    4) Has anyone used SimplyBusiness to get their insurance and would you recommend them?

    Thanks very much.

  • #2
    If you are sufficiently concerned about tenants that the availability of rent cover is a show stopper, don't rent to them.
    The insurers rules are no less cautious than your's should be.

    Rent cover is generally considered a great idea until you need to make a claim (some providers might be excellent, but you don't hear about them much).
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).


    • #3
      She has failed referencing (via OpenRent / RentGuard) as she cannot meet 50% of the rent.
      I don't understand the point of this criterion for joint tenants.

      How much is the rent and how much are their individual incomes?


      • #4
        The incomes combined would cover it fine, just the Rent Guard said if its not 50/50 then they would decline rent insurance as detailed above. I agree it sounds silly. Anyway the guarantor passed referencing checks so that means they will insure.


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