Landlords losing out on rent as recession bites
28/10/2009 - Landlords should re evaluate their insurance
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The rise in unemployment has added to the high level of tenants who are unwilling or unable to pay their rent. Landlords are being advised that now more than ever, is the time to take out a Rent Guarantee Insurance policy. The total amount of unpaid rent is increasing and some insurance companies are seeing payouts to landlords topping more than £1.5 million in 2009 so far. The benefits of each policy provider will differ, much the same as other insurance products, but with landlords facing difficult times ahead, it is good to know that the policies take in to account various scenarios that can differ from tenancy to tenancy.
The average policy will guarantee a rental period of typically 6 or 12 months and can provide additional cover until you are able to re let the property after you have gained access. Rental defaults and the legal costs incurred during the eviction process can also be covered. The landlord must take out the insurance before the tenants move in and the premium will be based on the tenant and not the property, landlords will typically be expected to take one months rent in full and a similar amount in deposit and a full credit check must be obtained prior to the tenant moving in to the property. Two forms of identification on the tenant must also be held.
