To what extent should I protect my revenue?
The extent with which you protect yourself with Landlords Insurance will be determined by the quality of your insurance cover but also by having the knowledge to determine what level of landlord insurance cover is right for each of your tenanted properties. As a landlord you will know that protecting your revenue is of fundamental importance.
There are measures that you will have already taken to mitigate the potential risk of not being paid by your tenants but despite this there are occasion where you could be completely exposed to the threat of no income.
Why might I need Loss of Rent insurance or Rent Guarantee insurance?
It is important to grasp the distinction between 'Loss of Rent' Insurance and Rent Guarantee Insurance.
Following a disaster, such as a fire or flood, your Buy to Let Insurance property may become unhabitable for a significant period of time. If you have 'Loss of Rent' insurance then your revenue would be protected or the cost of alternative tenant accomodation would be met. On the other hand, should a tenant simply stop paying their rent then it is 'Rent Guarantee' Insurance that would provide the help & financial support needed to maintain your revenue & persue the tenant.
'Loss of rent' insurance may be invaluable should disaster strike your property. 'Rent guarantee' insurance by contrast may be invaluable should your tenants be unwilling or unable to meet their obligations to pay rent. It's up to you to decide which of the two types of cover is most valuable to you.
Loss of Rent Insurance would normally be the provision of your Landlord Building Insurance wheareas 'rent guarantee' insurance is typically sold seperately to your landlords insurance & is generally considered to be the more costly of the two options.