What do I need to check before buying a rent protection policy?
Before buying rent guarantee insurance, you should ensure that you meet all legal requirements for renting out a property and have the correct documents to hand. You will need to be able to provide evidence of the following:
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Affordability – your tenant needs to be earning at least two and a half times the monthly rental amount (three times, if self-employed). This can be from working income, benefits, and pensions, or a combination of all three. Evidence of this income should be obtained (e.g. bank statements, pension statements, or proof from an accountant).
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A credit check clear of CCJs, bankruptcies or IVA’s – tenants need to be clear of IVA’s, CCJS and bankruptcies for at least 3 years.
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Proof of identification – we need two forms of ID to confirm the tenant’s identity, one of which needs to include a photo. We usually suggest a passport or driving licence along with a utility bill.
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A legal tenancy agreement – there must be a legal tenancy agreement in place at the time of making a claim, if this is not the case then the policy will be void.
The policy also requires that all documents you are required to issue by law have been issued to the tenant, these include:
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How to rent guide
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Gas safety certificate
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EPC
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Deposit prescribed information (if taken)
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Your tenants will have to be satisfactorily referenced using two forms of ID, one of which needs to be photographic, for a rent protection insurance policy to be valid. We will also accept evidence they have passed the right to rent as proof of identification.
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What is rent guarantee insurance?
Get ready to protect your rental income with our fantastic rent guarantee insurance! This incredible policy safeguards landlords against the loss of rental income when tenants face difficulties in making their payments. Plus, it includes legal expenses coverage, ensuring you have up to £100,000 for legal costs related to regaining possession of your property, including eviction and expert legal advice!
So, who should consider rent guarantee insurance?
It's perfect for anyone who could face financial strain if their rental income suddenly stops. Even the most reliable tenants can encounter tough times, making this insurance a smart and valuable safety net for your peace of mind.
While there’s no legal requirement for rent guarantee insurance, it's highly recommended if you depend on that rental income.
How does it work?
If your tenant fails pay but stays in your property, simply submit a claim! We'll enlist our trusted solicitors to review your case, and upon approval, they’ll help you regain possession. Not only that, our policy will ensure that payments continue for up to 15 months, even covering up to three months at 75% of the rental amount after eviction while the property is vacant. Don't miss out on this essential protection!
Cover up to £2,500 in rental income per month
Purchase our rent guarantee insurance (also known as rent protection insurance) and get peace of mind when renting out your properties. Our rent guarantee insurance policy also comes with legal expenses as standard, so you can get rent protection in the event of a tenant defaulting, and any legal expenses costs you may face, such as costs for evicting a tenant, are covered.
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Cover up to £2,500 in rental income per month
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Hotel Expenses - Up to £50 per day up to the limit of cover for hotel expenses where no alternative accommodation is available to you whilst you try to gain possession of your property for you to live in it.
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Landlord legal expenses helpline 24/7
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Full landlord legal expenses up to £50,000 (including eviction costs) to help with:
a) Negotiate your legal rights after an incident of physical damage to your property.
b) Negotiate your legal rights In trying to get possession of your property following a breach of tenancy agreement.
c) Negotiate your legal rights to evict anyone in your property that has not got your permission to be there.
Frequently Asked Questions
My tenant has failed the referencing check; can they use a guarantor?
If a tenant failed the tenant reference checks, they would be able to use a guarantor instead. However, a guarantor will have to complete and pass the reference checks and achieve a higher affordability factor to ensure the tenants right to rent.
What if my tenant can't get a guarantor?
If your tenant can’t get a guarantor, then you will be unable to purchase a policy as the acceptance criteria hasn’t been met.
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Do guarantors get credit checked?
Yes, guarantors will have to be credit checked by the policyholder to ensure they do not have any CCJs or bankruptcies outstanding or settled within the last three years.
Can someone be a guarantor if they have a bad credit rating?
Definitions of ‘bad credit rating’ vary, so for guarantors to be accepted you need to ensure they do not have any CCJs or bankruptcies outstanding or settled within the last three years.
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Is a guarantor liable for unpaid rent?
If a tenant has not met the acceptance criteria and a guarantor is in place and the tenant defaults then the guarantor will be liable for the rent.
Does landlord insurance cover unpaid rent?
Under normal circumstance landlord insurance usually covers Loss of Rent following a claim under the main policy. However, if your tenants simply stop paying their rent then your landlord’s insurance will not cover this and you would need a separate legal expenses and rent guarantee insurance which would provide cover to evict the tenant and pay your rent during the process.
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Will my rent guarantee insurance policy still cover me if I change my tenant?
Yes, the insurance is based on the property. As long as the new tenant has passed referencing and there is a tenancy agreement in place then the insurance will be valid.
Do I need rent guarantee insurance?
There is no legal requirement for the product, although it is highly advisable if you rely on the rental income.
Can I take out a rent guarantee insurance policy if my tenants are already in arrears?
Sorry. No.
How do I claim on my rent guarantee policy?
Should your tenant fall into arrears you have 90 days to submit a claim on your rent guarantee policy, but we always recommend submitting within 60 days as one months’ rent is taken from claims notified between 61 and 90 days.
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In the first instance you should contact the tenant to establish the reasoning behind the missed rental payment and try to agree a payment plan.
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Should the tenants not be able to make the rental payment you would be required to contact the administrator:
Lexelle Limited
PO Box 4428
Sheffield
S9 9DD
Telephone: 0114 350 4107
Email: assist@lexelle.com
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Upon acceptance of the claim and after the second missed rental payment, the policy will act to issue the relevant section notice to initiate eviction proceedings and make the rental payments.
At the conclusion of the claim, the final payment will be made and you will have the possession of your property which you can then re-let.
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