Rent Guarantee Insurance – is it worth it?

by Readers Question

13:51 PM, 28th October 2020
About 4 weeks ago

Rent Guarantee Insurance – is it worth it?

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Rent Guarantee Insurance – is it worth it?

I have a 2 bed house that I’ve just refurbed after a family did a lot of damage to it and ran up rent arrears. I’m now debating whether to holiday let it or family let again.

However, I’m reluctant to family let again without rent guarantee insurance.

I’ve never taken this out as I’m sceptical of insurance companies paying out.

Just wondered if members had any good bad experiences with rent guarantee, and any changes or claims since the government Covid-19 restrictions?

Many thanks

Tara


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Comments

Neil Patterson

13:55 PM, 28th October 2020
About 4 weeks ago

Hi Tara,

Our own insurance partner Jason McLean is also a sceptic: "As a brokerage, we have taken the decision to no longer sell this product as we do not believe it represents value to customers.

With the eviction ban, you are buying something you may not be able to claim against until at least March next year. The legal expenses element may be active straightaway."

Paul Shears

20:20 PM, 28th October 2020
About 4 weeks ago

Reply to the comment left by Neil Patterson at 28/10/2020 - 13:55
I am sure you are right in practice, but can you explain why the inability to evict a tenant has baring on whether an insurance policy should pay out if the tenant does not pay the rent.
How exactly does the insurance company get to reneg on the deal?

Steve Masters

10:00 AM, 29th October 2020
About 4 weeks ago

A fully referenced UK house owning rent and damages guarantor is the way to go.

NewYorkie

10:11 AM, 29th October 2020
About 4 weeks ago

Reply to the comment left by Steve Masters at 29/10/2020 - 10:00
You are probably right. Having someone guaranteeing the rent and any damages with their residential property as security, should be a motivator. However, what do you think about the value of rent guarantee insurance, not just now but in general?

Pete England - PaTMa Property Management

10:25 AM, 29th October 2020
About 4 weeks ago

I have taken it out for 1st 6 months after tenant has moved in, so we can get to know each other. I then review. In every case, I have stopped the insurance and willing to take the risk.
This property management software will give you more guidance to help you manage your properties. https://www.patma.co.uk/?ref=Lovat
Pete

Peter Hindley

18:09 PM, 29th October 2020
About 4 weeks ago

I had RGI a few years ago. Tenant failed to pay 3 months rent. Insurance company engaged Law firm who asked Guarantor but when they responded that they hardly knew the tenant & didn't know what they were signing up to the law firm dropped their pursuit of them. I had evidence of Tenant's business interests but Insurance said chances of pursuing them & getting rent back was 50/50 & not worth it, so they paid me out. It seemed wrong to me not to pursue things, but my losses were covered.

Paul Shears

20:07 PM, 29th October 2020
About 4 weeks ago

Reply to the comment left by Peter Hindley at 29/10/2020 - 18:09
Who was your RGI with please?

Peter Hindley

12:38 PM, 30th October 2020
About 4 weeks ago

Reply to the comment left by Paul Shears at 29/10/2020 - 20:07
I don't remember to be honest. It was arranged by letting Agent & included in service.

Ian Simpson

16:35 PM, 31st October 2020
About 4 weeks ago

I apparantly have RGI on one property I market through Romans. The tenants now owe two months unpaid rent, and I asked when the policy would kick in and pay the rent... The unwelcome response was "Because of Covid ..."

I think most, if not ALL tenants who are not paying at the moment will gleefully use the Covid excuse not to pay, and insurance companies are jumping on the same bandwagon. Funny how landlords have no rights or advantages from Covid too, unlike all the agents, tenants, and Insurers, which clearly do.

I have had another tenant saying she lost her job because of Covid - Asked for paperwork to back this up - eg letter from employer etc... No response. The hearing is this Thursday 5th, (We served s21 and s8 in August 2019), so hopefully the judge is sensible and not falling for her nonsense... I am not hopeful however, in this world over-run by Left-Wing Woke madness, where we cannot even control our own property any more.

Paul Shears

19:25 PM, 31st October 2020
About 4 weeks ago

Reply to the comment left by Ian Simpson at 31/10/2020 - 16:35
I still do not understand exactly what the "because of Covid" excuse is. Are you saying that somewhere in the insurance there is a specific Covid clause which nullifies the insurance. Also are there other all encompassing get outs for the insurance company. I have just bought Rent Guarantee Insurance through an agency. After some chasing from myself I finally got a copy of the actual insurance details. The agency informed me that they use the same insurance on many of their "fully managed" properties but it was pretty obvious that they never read the details. Having read the details myself, I could see no Covid get out clause.

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