Rent Guarantee Insurance etc

Landlord Discussion
1

Hi there,

We are currently considering a tenant whose salary is slightly below the calculated affordability limit, and we are thinking of potentially requesting a guarantor. As we review the referencing and insurance options, I have a few questions I’d appreciate some clarification on:

  1. Insurance & Guarantors
    My understanding is that, in the event of a default, the insurance claim would be pursued against the guarantor rather than the tenant. Is that correct?

  2. Referencing Types
    For our previous tenants, we used OpenRent for referencing, but I can’t quite recall the difference between comprehensive and non-comprehensive referencing. Could you please explain the distinction, and how it might affect insurance eligibility?

  3. Guarantors & the Renters’ Reform Bill
    With the upcoming changes introduced under the Renters’ Reform Bill, are there any updates or limitations regarding the use of guarantors?

  4. Rolling Tenancy & Insurance
    What happens to the rent guarantee insurance after the initial 12-month fixed term, when the tenancy becomes periodic (rolling)? Is cover still valid, or would it need to be renewed?

  5. Tenant Changes Mid-Term
    If a tenant is replaced during the insured period, how does this affect the policy? Would the new tenant need to be referenced again for the cover to remain valid?

  6. OpenRent Rent Guarantee Insurance
    I’ve seen that OpenRent offers Rent Guarantee Insurance for £249 per year, but I couldn’t find clear information about what exactly is covered, under what circumstances a claim would be granted, or what exclusions apply. 100% or all rent, eviction, notice, etc… Could you provide more detail on this if you used the insurance yourself.

I would be grateful for your insight on the above points, as we want to ensure we remain compliant and protected throughout the tenancy.

1 Like
2

I probably wouldn’t take a tenant below the affordability threshold any more as its going to get a lot harder to evict them if they default.

You cant just replace the tenant in a tenancy. That’s a new tenancy

1 Like
3

thank you David… but it is possible to replace the tenant’s name and details in the insurance policy? right?

4

@Glenn1

If OR can’t properly explain to your satisfaction what their rent Gtee insurance covers why on earth would you buy it?

I didn’t understand your reference to an insurance claim being claimed against the guarantor tbh. If you have a guarantor then if the tenant doesn’t pay the guarantor becomes liable. Nothing to do with insurance. Rent gtee insurance is a different thing which protects you under specific circumstances if the rent isn’t paid, and in those circumstances you claim from the insurance co.. Whole point is to protect your regular income while you get them to leave if necessary by eviction.

You can purchase landlord insurance separately worth asking what it includes (generally landlord contents but also I think legal costs for eviction) and whether there is a rent gtee option. (It usually will have). Google ‘best landlord insurance ‘ and eg look at the ones that which recommend. (I use Alan Boswell and it’s cheaper than OR for the rent gt insurance option) but there are many providers out there.

I’d expect any insurance policy to expect landlords to have referenced tenants including if these change midway through the v policy. If you have a new tenant why wouldn’t you want to do referencing again? Just as you want to check if they can afford etc for the 1st tenant. Why would any insurance Co take a risk on unreferenced folk?

Good luck

1 Like
5

thank you David240…………

1 Like