Rent guarantee insurance

tasticz

If a landlord has rent guarantee insurance, will it kick in if the tenant is unable to pay their rent due to being affected by COVID 19? I understand the government is bringing in emergency laws, etc. just wondering if the insurance would be of use during this crisis times?

davidmcn

I would expect it to kick in when the tenant stops paying the rent. The reason why they're not paying the rent isn't relevant. But you'd need to read the policy to be sure.

tasticz

These are the General Exclusions. not sure if #2 applies in this case (hidden enemy  )
1 Radioactive contamination
In no case shall this insurance cover any Event directly or indirectly caused by or contributed to by or arising from i ionising radiation or contamination by radioactivity from any nuclear fuel or fuel from nuclear waste from the combustion of nuclear fuel ii the radioactive toxic explosive or other hazardous properties of any explosive nuclear assembly or nuclear component thereof

2 War and similar risks
Any Event occasioned by or happening through or in consequence of war invasion acts of foreign enemies hostilities or warlike operations (whether war be declared or not) civil war rebellion revolution insurrection civil commotion assuming the proportions of or amounting to an uprising military or usurped power or martial law.

3 Nationalisation
Any Event occasioned by nationalisation confiscation requisition seizure or destruction of or damage to property by or under the order of any Government or public or local authority

eddddy

Are you asking as a landlord or a tenant? 

Landlord's rent guarantee insurance will kick-in if the tenant doesn't pay the rent - whatever the reason.

The insurance policy will require the landlord to start eviction proceedings.

The insurance company will pay the landlord the unpaid rent, and then chase the tenant to get the unpaid rent back plus fees.- probably using tracing agents, debt collectors etc - and ultimately through the courts.

So from a tenant's perspective, you're probably worse off if your rent is insured and you don't pay the rent. You're likely to be evicted more quickly, and pursued much more aggressively, and have a chunk of extra fees to pay.

(The new emergency legislation seems to say that landlords can't evict for the first 3 months for non-payment of rent - so I guess the insurers might have to pay for those 3 months, and then chase the tenants to get that money back.)

tasticz

eddddy said:

Are you asking as a landlord or a tenant? 

Landlord's rent guarantee insurance will kick-in if the tenant doesn't pay the rent - whatever the reason.

The insurance policy will require the landlord to start eviction proceedings.

The insurance company will pay the landlord the unpaid rent, and then chase the tenant to get the unpaid rent back plus fees.- probably using tracing agents, debt collectors etc - and ultimately through the courts.

So from a tenant's perspective, you're probably worse off if your rent is insured and you don't pay the rent. You're likely to be evicted more quickly, and pursued much more aggressively, and have a chunk of extra fees to pay.

(The new emergency legislation seems to say that landlords can't evict for the first 3 months for non-payment of rent - so I guess the insurers might have to pay for those 3 months, and then chase the tenants to get that money back.)

Hi eddy, thanks for your response. I was asking a general question as I had added that protection cover as an add-on to my insurance when I purchased the cover but also for other landlords with lets say 1 property who use their rental income to survive on. 

davidmcn

tasticz said:

These are the General Exclusions. not sure if #2 applies in this case (hidden enemy  )

2 War and similar risks
Any Event occasioned by or happening through or in consequence of war invasion acts of foreign enemies hostilities or warlike operations (whether war be declared or not) civil war rebellion revolution insurrection civil commotion assuming the proportions of or amounting to an uprising military or usurped power or martial law.

Not unless you think Putin has sent the virus to us.

tasticz

davidmcn said:

tasticz said:

These are the General Exclusions. not sure if #2 applies in this case (hidden enemy  )

2 War and similar risks
Any Event occasioned by or happening through or in consequence of war invasion acts of foreign enemies hostilities or warlike operations (whether war be declared or not) civil war rebellion revolution insurrection civil commotion assuming the proportions of or amounting to an uprising military or usurped power or martial law.

Not unless you think Putin has sent the virus to us.

In Russia, they are saying we sent the virus to them!!

billyoung1611

I'm a private landlord just one property which is my only income  ,I cant claim any benefits as i own a property .Tenants say they cannot afford to pay  the rent due to corona ,had an email today from direct line saying they are not going to honour rent guarantee ,which was the only reason i went with them .Does any anyone know if I can claim anything as i dont know what I am going to do with no income coming in 

davidmcn

billyoung1611 said:

Tenants say they cannot afford to pay  the rent due to corona ,had an email today from direct line saying they are not going to honour rent guarantee. Does any anyone know if I can claim anything as i dont know what I am going to do with no income coming in 

Did they explain why? Have you read the policy?

billyoung1611

Yes they said that due to government giving 3 months security quote "These announcements remove the legal mechanism to take a rent guarantee claim forward and so no new rent guarantee claims will be paid for the next three months." 

greatcrested

he governmement has not 'given three months security' to landlords. They have given a three months mortgage holiday. If you have no mortgage, the government has given you nothing.

Athough the government has given three months security to tenants that is simply a delay to court action. Notice (as required by the insurance) can still be served, and the insurer can still evict after three months and reclaim in full the rent arrears.

However, if that is DL's current policy, you may need some heavy legal support to challenge it, though I imagine there will be numerous other LLs with DL policies who will be behind/beside you...