Protect your income with loss of rent cover
Loss of rent cover is designed to protect against the loss of rental income in circumstances where there is a claim for loss or damage that renders the property uninhabitable for example a fire or a flood. Loss of rent cover will only pay rental income that is lost whilst a property is uninhabitable. Your tenants may not be required to pay you rent for the period of time that the property cannot be lived in. The cover is typically available for between 12 and 36 months and the amount offered varies from insurer to insurer.
What is not covered?
Customers often mistakenly think that loss of rent cover is designed to protect again their tenants failing to pay rent. This is not the case. The key point here is that the damage to the property must have been caused by an insured event.
What is the difference between alternative accommodation and loss of rent?
Tenancy agreements do not usually require landlords to provide alternative accommodation for their tenants in the event of the property becoming uninhabitable, unless something you have or haven’t done has caused the damage. Similarly, your tenants may not be required to pay rent during the time that the property is uninhabitable.
An example of alternative accommodation
If your tenant intends to have the costs of their alternative accommodation paid for by you, they must continue to pay the rent for the uninhabitable property. When this happens, any loss of rent will not normally be paid to you by your insurance policy because the tenant is still required to pay the rent.
An example of loss of rent
Your tenant may seek to end the tenancy altogether and give the keys back. There are no alternative accommodation costs. In this case, your insurers will usually pay loss of rent whilst the property is undergoing repairs provided cover is in place.
The examples above are not definitive as it depends on the policy, the terms of the tenancy agreement and the cause of the damage. The insurance will not normally pay both alternative accommodation and loss of rent.