Common reasons why landlords claim on rent guarantee insurance

Having suitable insurance in place can help to provide peace of mind that you have a financial safety net in case the worst happens. Rent guarantee insurance can provide a range of different covers under one policy.

As the NRLA’s insurance partner, Gallagher can provide insurance policies to landlords for Legal Expenses and Rent Guarantee Insurance, which can help in various scenarios. This article explains the different scenarios landlords may make a claim on their insurance for.

Rent arrears

According to the latest English Private Landlord Survey from Gov.uk, 42% of landlords reported rent arrears as the reason for ending a tenancy.

When a tenant struggles to meet their monthly rent, do you have a backup for paying your mortgage and other costs? As well as the financial impact of rent arrears, if you are forced to issue court proceedings against your tenant, you could incur substantial legal fees.

Legal Expenses and Rent Guarantee Insurance can provide cover designed to help protect landlords from the financial losses that can occur as a result of tenants failing to pay their rent. This insurance can typically cover rent arrears and legal costs associated with the eviction of a tenant who has not paid their rent.  

Mediation services

Mediation is an alternative dispute resolution (ADR) that gives landlords and tenants the opportunity to resolve issues without going through the courts. This process can be useful for rent arrear disagreements between landlords and tenants. The purpose of mediation is to help the two parties find a mutually agreeable solution overseen by an independent mediator.

Mediation involves an impartial person, trained to deal with difficult discussions, who acts like a referee in a meeting between the two sides in an attempt to find a way to resolve the problem. A mediator will not make a decision, nor will they enforce any resolutions or pathways. What they will do is guide the parties to find an outcome that will be entirely decided by the landlord and tenant.

Eviction costs

When evicting a tenant, you can choose to either do so independently or to instruct a solicitor for your case. Further costs will be incurred if you do decide to use a solicitor. These costs can vary greatly depending on the solicitor you choose, your location, and the complexity of the case.

If you decide to take out a Legal Expenses and Rent Guarantee Insurance policy with Gallagher, in the event of a valid claim under Gallagher’s insurance, a solicitor will be appointed for you to handle your case.

The benefits of insurance with Gallagher

• Up to 5 tenants can be covered on one policy
  All tenants must be on a single tenancy agreement.
   
• Cover can be offered for an existing tenancy agreement
  A 90-day claim exclusion period from the policy start date may apply unless you had continuous insurance.
   
• Extended cover after eviction
  Following the successful eviction and vacant possession is gained, a further payment may be able to be made for a 3-month period until the property can be relet.
   
• Additional protection for your needs as a landlord
  Access to additional insurance offerings, such as landlord insurance.
   
• Support from a specialist team
  Proud to have been providing insurance solutions since 1927.

Policy limits and exclusions may apply. Please see policy wording for full terms and conditions.

Referencing is a requirement of Gallagher’s Legal Expenses and Rent Guarantee Insurance policy. You can read more about the tenant and credit check services available to NRLA members here.

Get a quote

Rent arrears and eviction difficulties are common issues, and it is important for landlords to understand and follow the proper procedures. Gallagher can assist you in finding suitable Legal Expenses and Rent Guarantee Insurance, providing financial protection against unpaid rent and legal expenses. 

We can help you protect your finances as a property owner and face the future with confidence.  

The sole purpose of this article is to provide information on the issues covered. This article is not intended to give legal advice, and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and/or market practice in this area. We make no claims as to the completeness or accuracy of the information contained herein or in the links which were live at the date of publication. You should not act upon (or should refrain from acting upon) information in this publication without first seeking specific legal and/or specialist advice. Arthur J. Gallagher Insurance Brokers Limited and National Residential Landlords Association, an Introducer Appointed Representative of Arthur J. Gallagher Insurance Brokers Limited, accepts no liability for any inaccuracy, omission or mistake in this publication, nor will we be responsible for any loss which may be suffered as a result of any person relying on the information contained herein.

National Residential Landlords Association is an Introducer Appointed Representative of Arthur J. Gallagher Insurance Brokers Limited, which is authorised and regulated by the Financial Conduct Authority. Registered Office: Spectrum Building, 55 Blythswood Street, Glasgow, G2 7AT. Registered in Scotland. Company Number: SC108909.