Rent guarantee insurance, sometimes known as rent protection insurance, can offer a financial lifeline to many landlords. The policy covers the rent if your tenant defaults, though there are limits to most policies, so it is essential to read the small print.
A tenant defaults on their and policy pays out for the landlord’s loss of rent. The economic climate doesn’t help the potential for rent default. Money is tight and employment is uncertain, so your tenant could easily fall on hard times.
A tenant who defaults can cause all sorts of problems. Would you be able to cover your outgoings if your tenants fell behind on their rent? Or would you be able to fund any legal costs to try to recover the arrears? If not, you should consider rent guarantee insurance.