Rent insurance for tenancy guarantors (or tenants)

rich_legs

I will soon be standing as guarantor for my daughter as a tenant in a rental property. Can I take out insurance to cover the rent in the event that she loses income (through redundancy, serious illness etc)? Or would a policy of that sort need to be taken out by her as tenant rather than by me as guarantor? Either way, what would that specific type of insurance be called? I have found a lot of products online that insure the landlord against loss of rent but nothing really to provide cover for a tenant or their guarantor.

LinLui

Your daughter would have to take out income protection insurance - and it doesn't come cheap.

LinLui

Your daughter would need income protection insurance - and it isn't cheap.

saajan_12

Not familiar with any rent guarantee insurance and tbh not surprised - it feels too far within the control of you / someone you know closely if it had a broad coverage of reasons why someone may be unable to pay rent - eg if she left work, spent too much elsewhere, etc. 

There is income protection insurance and accident, sickness and unemployment (ASU) insurance - not specific to tenancies, but its to replace part or all of the income. You'd need to check if she needs to get the policy and be the beneficiary or if you can. 

DullGreyGuy

Rent Guarantee is for the Landlord to take out in the event of a tenant default. The insurer then takes on the responsibility of chasing the tenant for the monies due. There is far too much of a conflict of interest between a father/daughter (or whatever the relationship between guarantor and guarantee) for a simple "the tenant hasn't paid" coverage. 

As said, Permanent Health Insurance or ASU is the natural solution, unfortunately both are sold as Income Protection these days. Ultimately that doesn't protect the OP as the Daughter could for whatever reason just decide not to pay their rent despite being capable of doing so but thats what signing up as a guarantor has to be done with full knowledge of what you are signing up to.

Jungletoes

I have been looking at Only My Share's website that offers insurance for £99 as a one-off payment.  I am acting as guarantor for my daughter, who was unable to find a house in the city she is studying in that is not a joint tenancy.  It seems too good to be true, £99 and will cover unpaid rent of others in house up to £10k.  There seems to be other firms offering this too, but no-one seems to know about it including estate agents or other parents.  Desperate to find an answer as I am bricking it should one of her four housemates decide to bale out of uni, but not keen on wasting money.

Jungletoes

I have been looking at Only My Share's website that offers insurance for £99 as a one-off payment.  I am acting as guarantor for my daughter, who was unable to find a house in the city she is studying in that is not a joint tenancy.  It seems too good to be true, £99 and will cover unpaid rent of others in house up to £10k.  There seems to be other firms offering this too, but no-one seems to know about it including estate agents or other parents.  Desperate to find an answer as I am bricking it should one of her four housemates decide to bale out of uni, but not keen on wasting money.

Jungletoes

There are firms, such as Only My Share that offer guarantor insurance for about £99 a year to cover unpaid rent and damage up to £10k.  Why does no one seem to know about these or use them?  Any ideas?  I am also in same boat, acting as guarantor in a joint tenancy.

XRS200

Jungletoes said:

There are firms, such as Only My Share that offer guarantor insurance for about £99 a year to cover unpaid rent and damage up to £10k.  Why does no one seem to know about these or use them?  Any ideas?  I am also in same boat, acting as guarantor in a joint tenancy.

Looks like it's not actually insurance.

Can't see that they are FCA registered

DullGreyGuy

XRS200 said:

Jungletoes said:

There are firms, such as Only My Share that offer guarantor insurance for about £99 a year to cover unpaid rent and damage up to £10k.  Why does no one seem to know about these or use them?  Any ideas?  I am also in same boat, acting as guarantor in a joint tenancy.

Looks like it's not actually insurance.

Can't see that they are FCA registered

If you read the contract it states they are an appointed representative of an FCA regulated entity, it also claims a Lloyds of London entity is backing it but oddly they've XXXXXXX'ed out the name and give its financial strength back in 2017. 

There are limitations to the cover too... doesn't cover arrears in the first 3 months, effectively doesn't provide cover until deposits have been exhausted. There is also the "if you had any reason to suspect" your co-tenants wouldn't pay on time when buying... thats a rather open clause

XRS200

I'm sure I read on their website that it is a service, not an insurance.

Looks like the company has insurance but not the guarantor.