WHICH RGI COMPANY?
WHICH RENT GUARANTEE INSURANCE COMPANY?
In these changing times within the Private Rented Sector (PRS), landlords are seeing an avalanche of legislation and new taxes emerging within the industry. As the UK rental market grows, the Government, HMRC and local authorities think they have stumbled upon an endless gold stream of cash to be taken from the Private Rented Sector. Government and councils are not concerned that landlords may need all of their rental income to support their pension or that landlords may need to use the rental income to keep their rental properties in good repair. All these government bodies expect landlords to provide a five-star hotel service for tenants at a two-star Board only rate!
So, more than ever, landlords need all of their rental income to balance their income to pay their bills, keep their properties in good repair, safe and certificated. The problem arises for landlords when the tenant stops paying the rent because the landlord (unlike a hotelier) cannot simply evict a tenant on the day they don’t pay the rent – landlords need to go through the very expensive court system and then very expensive bailiffs process, which may take upto 6 months to evict a tenant and while this is happening the tenant can legally stay in the property but not paying the rent.
A landlord who is still having to pay the mortgage, insurances, property upkeep, certification, licensing fees, etc (and who is not receiving the rent) can suffer truly catastrophic, financial and even health problems whilst they try and evict the tenants – and on top of those costs they will need to pay for all the court costs and bailiff cost as well. It is a very simple equation; when a tenant turns bad and violates a property the cost to a landlord in lost rent, eviction costs and property damage can run into the tens of thousands of pounds.
Buying or renting – what security is offered?
When we buy a property we have to put down a substantial cash deposit. The deposit is the way that the mortgagee protects its loan, should the mortgagor fail to pay the mortgage and then needs to be evicted. Landlords can take a deposit which normally equates to 6 weeks, but in most cases this is totally insufficient to cover a tenants rent arrears, property damage and a landlord’s legal costs to evict – so unlike a mortgagee, a landlord can be subjected to massive losses if a tenant turns bad.
What are a landlord’s options to protect themselves?
A landlord has one very efficient way of protecting themselves against vast losses, by taking Rent Guarantee & Legal Expenses Insurance. These policies are quickly becoming the landlords new best friend. Rent Guarantee & Legal Expenses Insurance can really take the sting out of the tail when a landlord gets lumbered with a bad tenant, because Rent Guarantee & Legal Expenses Insurance will pay the rent if the tenant stops and then nominate a solicitor to evict the tenant and cover all the solicitors costs of the eviction. In some companies, like RentsafeUK.co.uk, the insurance will even pay for the legal costs to take the tenant to court to get the damages for a tenant who has caused malicious damage to your property.
So which company offers the best deal on Rent Guarantee & Legal Expenses Insurance?
Quite simply, all rent guarantee insurers have variations of one policy but they all have different cover. Some will cover you for 6 months; some will cover you for 1 year; some will cover you for £10.000 and some will cover you up to £75,000; some will give you an excess and some pay from day one. The variations of policies are very different and the small print for claiming can be quite daunting.
The real work is done at the beginning, when the tenant is referenced. Tenant Referencing is about being vigilant at the outset and not taking a problem tenant so the insurers can wriggle out of a claim but, more importantly, the key is not taking someone else’s problem that left a few weeks earlier that has not been registered on most systems. Even a landlord who has wisely taken rent guarantee insurance and who is receiving the rent from the insurers and legal bills paid does not want to be lumbered into having to spend hours producing documents to their solicitors to process the eviction papers to evict a tenant.
So how does Rent Guarantee & Legal Expenses Insurance work?
To explain how it works, imagine you wanted to insure your car. You simply phone up, give the insurers your details and answer all the questions truthfully, pay your money and you will be immediately covered. This works in the same way for rent guarantee insurance. Now imagine you have a claim on your car, the first thing the insurer will ask for is a copy of your license, MOT, tax, etc. If you cannot provide these or have endorsements that you did not declare your claim will be refused in the same way as your car insurer. Your rent guarantee insurer will ask you to prove the tenant was eligible to rent your property and you will need to provide documents that the tenant had a clean financial record, showed affordability, solid repayments of bills and loans, showed wage slips confirming income and even evidence for the right to rent act – and if you cannot prove all of these your claim could be refused a claim by the insurers………
We looked at a cross reference of Rent Guarantee & Legal Expenses Insurance providers who topped the organic top of the listing with the leading search engines. We covered companies like endsleigh, justlandlords, homelet, rent4sure, rentguard, and even looked at the comparison sites like moneysupermarket.com and comparethemarket.com. All the sites we looked at offered a different service at different prices, but the one thing that stood out was that none of them did it all.
After doing a survey of all the companies we, at Rentsafeuk.co.uk, decided that we would offer it all; ‘The Full Monty!’; a policy to keep landlords safe if their rent was £400pcm or £4,000 and at a fixed price. We coupled our insurance product with our own referencing company Tenant Referencinguk.com, who has today achieved the best tenant referencing, and together we have produced the best Rent Guarantee and Legal Expense Insurance package in the UK today.
In summary: to protect our landlord clients and letting agents RentsafeUK.co.uk needed to firstly make sure that they did the best tenant referencing available and that was achieved with Tenant ReferencingUK.com, which is unparalleled in UK tenant referencing and part of the group. Then RentsafeUK.co.uk needed to offer a policy which had the maximum amount of cover available; £50,000 per claim, no excess on rent arrears claims and legal expenses cover to cover eviction and the recovery of damages for malicious damage caused by the tenant. And that is exactly what Rentsafeuk.co.uk have done. You can now get the best RGI (Rent Guarantee and Legal Expenses Insurance) in the UK with the best tenant referencing for as little as £100 including tax.