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Tenant default insurance

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Why is rental default insurance important?

Every year, millions of tenants default on their rent payments. Rental default insurance, which we call tenant default cover, is a type of rent protection backstop for landlords. If your tenant defaults on rent – whether it’s their first missed payment or they’ve got a history – this insurance can cover you for owed rent, up to £50,000.

  • landlord insurance tenant default – easy to add on to your standard policy
  • 12 months of rent covered and all tenant types considered
  • no excess to pay and no waiting around – claim from the first missed payment
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Tenant default insurance for landlords – what’s covered?

Tenant default insurance is designed to give landlords a layer of protection, in case their tenant defaults on rent payments. For example, if your tenant was made redundant and fell behind with their contracted rent, you might decide to issue an eviction notice and claim back the money you’re owed, up to £50,000.

Thinking about claiming? Bear in mind, you’ll need to serve an eviction notice first, before you can claim on your tenant default insurance.

£50,000 of missed rent

What does this include?

  • up to £50,000 in rental arrears, with no limit on your monthly rental amounts
  • tenant still in the property? We can pay your claim while they’re there, if necessary

We don’t put any limits on the amount of rent you’ve agreed with your tenant. Rental default insurance is designed to cover it, up to a total value of £50,000 across your policy’s term.

When would I need this?

  • your tenant is made redundant and contacts you to discuss their options. You set up a payment plan with them, but don’t receive any rent for two months.
  • after contacting your insurer, you decide to serve an eviction notice and recover the £4,200 you’re owed in rent, using your landlord insurance (tenant default was added to this when you set it up).

12 months of rent

What’s covered?

  • up to £50,000 in rental arrears, across a 12 month period

When would I need to make a claim?

  • your tenants are late on their rent and have only paid part of last month’s agreed amount. They’ve stopped returning your calls so you contact your insurer – you’ll need to serve an eviction notice before your tenant default insurance can kick in
  • one of your tenants runs a shop and has had a poor financial year. You’ve tried to set up a payment plan to help them keep on top of the rent, but after five missed or partial payments you decide to serve an eviction notice and claim the rent you’re owed

Cover during repairs

What’s typically covered?

  • 50% of your monthly rental amount for three months, if your tenant causes intentional damage and the property is assessed as being uninhabitable
  • soiled carpets, walls, and fittings
  • severe damp and access issues, following malicious damage

When would I need to make a claim?

  • tenants at your property have caused severe, intentional damage to your property, after you serve an eviction notice due to six missed payments. They’ve torn up the carpets, smashed three windows, and kicked holes in each door.
  • you’re quoted a month’s work by a contractor to fix the damage, and decide to use your rental default insurance to claim 50% of the rent you’ll miss.

Legal advice helpline

What does this include?

Access to a panel of solicitors, ready to offer legal advice on a wide range of services, including:

  • contractual disputes
  • employment issues and concerns/disputes
  • tax, furlough, and employee contract queries

When would I need this?

  • during a routine inspection, your tenant lets you know they’ve decided to quit their job and become self-employed. You decide to get some very initial legal advice, in case they experience financial problems and have trouble paying the rent

No excess

How does this work?

There’s no excess on our tenant default insurance – we don’t ask you to cover any part of the rental arrears before we step in. There’s also no need to wait for a certain number of missed payments before contacting us, you can claim from the first time it happens.

We’ll consider all tenant types

How does this work?

This type of rent guarantee depends on your tenants and how likely they are to manage their rent payments. When deciding on your claim, we’ll consider all tenants who pass certain credit checks, but may exclude others.

Who might not be covered?

Typically, unemployed tenants, students, or people on state benefits are more likely to fail a credit check, as they’re more at risk of defaulting on their rent.

We’ll look at each case individually though, and some higher-risk tenants who’ve paid rent upfront or who have good references from a previous landlord may be covered.

This content has been created for general information purposes. Make sure you have the right level of landlord insurance by checking your policy documentation for details. Read our full Terms and Conditions

How much does tenant default insurance cost?

Find out how much you’ll pay by comparing prices from a range of trusted insurers. You choose what goes into your policy, so you only pay for what you need.

Prices start from £7.24 per month

Get your quotes in 7 minutes – prices are guaranteed for 30 days.

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How we work out example prices. Prices are based on payment over 12 months as of 28/10/2021 and are inclusive of Insurance Premium Tax (IPT). If you pay in a lump sum or by Direct Debit, extra fees may apply.

Example tenant default insurance quotes, real prices

£32.14 /month

£285.7 /year

Renting a semi-detached house to a young couple

  • Residential
  • Semi-detached house
  • 3 bedrooms
  • 1 bathroom
  • Built between 1980 and 1989
  • 1-2 years
  • Occupied
  • Based in Bradford

Landlord buildings

£150,001 to £175,000


Property owners' liability

£2,000,000


Tenant default

Included

£61.69 /month

£548.38 /year

Renting a flat house to a small family

  • Residential
  • Individual flat in purpose built block or building
  • 2 bedrooms
  • 1 bathroom
  • Built between 1945 and 1979
  • Over 5 years
  • Occupied
  • Based in Sale

Landlord buildings

£200,001 to £250,000


Property owners' liability

£2,000,000


Tenant default

Included

How we work out example quotes These examples are real quotes from our online system (created 22/04/2021). They’re based on a range of factors, like employees and location. Your own quote will be based on what you tell us about your property. Prices may go up or down from day to day, so the prices you’re quoted may differ to the ones you see here.

How it works

  • Pick what goes into your policy

    Only pay for what you need

  • Get prices from a range of insurers

    Choose the best fit for you

  • Buy online in minutes

    Get your documents the same day

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How do claims work?

Unlike price comparison websites, we take the hassle out of claims for you. We know how important it is to get your business back on track quickly – and with a minimum of fuss. That’s why you get access to your dedicated claims any time, day or night. Call them on 0333 207 0560 or claim online. They’ll do their best to be fair and supportive. The figure below is rounded across our range of products. Our claims process may vary for different products and operates on a ‘claim by claim’ basis.

£30 million in claims paid out in 2019

Paying 80% of settled claims within 24 hours in 2019

Example claim

Having insurance through Simply Business has saved landlords thousands of pounds when a tenant defaults on rent.

Verity saved more than £8,900

After months of chasing for late rent Verity (not her real name), attempted to post a letter to her tenants through the letterbox, but found it had been covered over. The legal helpline included in her tenant default insurance provided immediate advice, and her policy covered the lost rent.

Insurance payout

£8,957.00

Covering the cost of tenant default


Verity’s costs

£100

The excess amount stated in Verity’s policy terms

Chosen by 800,000 small businesses and landlords

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Rental default insurance FAQ

Whether you’re new to buying landlord insurance or you’ve been letting your property for a while, here are the answers to some commonly asked questions about tenant default meaning and other landlord topics. You can also check out our landlord insurance FAQs.

  • Tenant default insurance (also known as ‘rental default insurance’) is a popular landlord protection. It can cover the income your property generates, if your tenants can’t pay their rent. Sadly, millions of UK tenants default on their rent every year, often due to their own financial difficulties – our tenant default cover is designed to protect against this, up to a total value of £50,000.

    If you’ve included tenant default cover in your landlord insurance policy, keep in mind that you must serve an eviction notice to your tenants before making a landlord insurance tenant default claim.

  • The first step will usually be a call to our UK-based claims team helpline for guidance on how to proceed. From there, most cases begin with an eviction notice to your tenants using a Section 21 or Section 8 notice, or both, to claim on your policy. Once you’ve served notice, our claims team can guide you through the process of recovering your lost rent.

  • Rent guarantee and tenant default cover are often misunderstood as being the same thing. Both of these covers are designed to protect a landlord’s income if their tenant stops paying rent – however, there are key differences which you should be aware of before adding either protection to a landlord insurance policy.

    Tenant default cover is designed to pay you the rent you’re owed if you decide to evict tenants who are behind on the rent. Among other things, you’ll need to serve a Section 21 or Section 8 notice, or both, to claim on this type of cover.

    Rent guarantee insurance is a different form of protection. It can include cover for properties left unoccupied for a period of time between tenants, as well as instances where the property is uninhabitable due to renovation work, malicious damage, or disasters like fire and flooding. It’s often an option you can discuss with a letting agent who specialises in managing the property for you.

    Simply Business provides tenant default cover as an option for your landlords’ insurance policy, but we don’t currently include rent guarantee in our quotes.

  • You aren’t legally required to take out a specific landlord policy, but remember – a conventional home insurance policy won’t cover you for rental activities, and a mortgage lender will usually demand you have specific landlord cover in place, before you let your property.

    Popular covers include property owners’ liability and contents insurance, for accidents on your property, plus buildings cover to protect the property itself.

  • You can add a range of other important covers to your landlord insurance policy, all while keeping it simple with a single premium and a single renewal date. You might consider these covers:

  • As we’ve outlined above, there’s currently no legal obligation to take out a dedicated landlord insurance policy. However, a home insurance policy won’t cover you for the specific risks you and your tenants face, and a mortgage lender will usually require you to have buy-to-let insurance in place too, before renting out your property.

We create this content for general information purposes and it should not be taken as advice. Always check policy documentation for details and seek professional advice. Read our full Terms and Conditions

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