In recent times we have encouraged Landlords to consider rental default insurance to cover events where a tenant refuses to pay rental, disappears or has had to be evicted.
This product is relatively new and is little known by most landlords. The benefits of this insurance can be immense for little, if any cost, to the landlord. This rental default insurance is generally only available in conjunction with the normal fire insurance policy and is valid only if the property is managed by a licenced estate agent.
Some landlords confuse this insurance with the 12 months rental insurance that comes with a Fire Insurance policy which applies in the event where a property is burnt down and the landlord receives the rental, while the new building is being built.
The benefits of rental default insurance are often more than the obvious benefits of rental default itself – for example landlords may find a property easier to sell, because it has this insurance in place. Also the fact that financiers can see the added security of the lease, this could help in refinancing situations.
It is easy for landlords to think that they may never need this insurance, but we find that often it is only when a tenant defaults, that the landlord suddenly asks for more details – by that time it’s too late! Obviously insurance companies generally would not be interested to offer this type of policy when a tenant is in default.
We are able to refer on landlords who are interested in obtaining more information as to this insurance.
by Atholl Williams in Latest News
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