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Do you cover loss of rent?

Some of our policies do cover a loss of rent but it is important to understand what that means and equally importantly, what it does not mean.

Our policies will typically cover a loss of rental income in situations where that has arisen due to an insured risk. So, for example, if you were forced to move your tenants into temporary accommodation due to a property problem arising from an insured risk, then typically that loss of income or additional cost would be covered (up to pre-agreed limits).

On the other hand, a standard policy does not cover a loss of rental income arising from situations such as:

  • your tenants withholding rent due to a dispute with you;
  • tenants who are unable to pay their rent due to accident, injury, pregnancy, illness or redundancy (etc);
  • unpleasant situations where your tenants have fled leaving large unpaid rent arrears;
  • circumstances where you have attempted to recover funds for rent arrears or damage to your property from the deposit but where the licensed deposit holder has not agreed and refused to allow the deduction from the funds they are holding.

Unpaid rent is perhaps one of the most commonly encountered problems for landlords and although there is no solution which is guaranteed to avoid it, there are certain steps you can take to help reduce the likelihood of it arising:

  • build and maintain an excellent communication relationship with your tenants;
  • deal with any late payments immediately and do not allow the situation to drift and arrears to build up;
  • be understanding but cautious about accepting verbal excuses and promises – be polite but go into writing immediately and follow the legally-defined steps for rent arrears management.
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