Insurers must support landlord customers through rent guarantee add-on or risk losing them, says GlobalData

It is incredibly tough for insurers to keep customers satisfied at present and landlord insurance, where customers are caught between not receiving rent and being unable to claim for rent guaranteed is one example, says GlobalData, a leading data and analytics company.

According to GlobalData’s 2019 UK Insurance Consumer Survey, 13.4% of respondents rented their main residence from a private landlord. Additionally, 57.5% of homeowners letting out their properties had a specific landlord insurance policy in 2019. Only some of these policies will have rent guarantee add-ons though, enabling landlords to claim for rental payments in the event that tenants fail to make these. However, the coronavirus outbreak has left many of these landlords in limbo.

Rent guarantee add-ons are an invaluable feature for landlords paying off the mortgage on a property, as well as those that have tenancy agreements with individuals that are more likely to default on their payments, such as the freelancers or the self-employed.

Beatriz Benito, Senior Insurance Analyst at GlobalData, said: “Rent guarantee add-ons are intended to bring peace of mind to landlords. As the coronavirus pandemic spreads around the world, more and more individuals are losing their jobs.”

The UK Government recently announced that landlords will not be able to start eviction proceedings in a court against tenants failing to pay their rent without giving them at least three months’ notice, with emergency legislation dictating this initially until September 30, 2020. Typically, insurers will pay default rent payments if the tenant has not paid rent for 30 days and an eviction notice has been issued, so it is difficult to claim for this.

Landlords in this circumstance are likely to question what the advantage is in them holding a rent guarantee policy if they cannot make – at least temporarily – a claim when they most need to. Bentio added: “To avoid customers canceling their policies, insurers should devise plans to offer added-value services. For instance, insurers can offer support to clients with regards to reaching alternative agreements on longer-term rent schedules with their tenants, in addition to offering them legal advice if possible. Insurers could also offer lower premiums – or premium breaks altogether – during these unprecedented times. Insurance is an industry with low customer trust, and failing to engage with and offer assistance to clients during these times will only worsen perceptions.”

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