The private rental sector (PRS) is expected to increase to a quarter of all UK homes by 2021. Through a combination of rising house prices and personal choices, such as wanting greater flexibility, a growing number of people are opting to rent their home.
As the UK housing market becomes more renter focused, tenants up and down the country must safeguard themselves against any potential issues, which is why we stress the importance of rental protection for tenants.
Contents insurance is generally seen as the most popular type of cover for renters when it comes to protecting themselves. But there are other ways for tenants to enjoy added security.
Rent guarantee is well known as an insurance option for landlords that want to protect themselves against tenants who don’t keep up with the rental payments. However, this type of insurance doesn’t cover the tenants, who are still liable for unpaid rent.
There is now an option for renters, however. And it comes in the form of rental income protection benefit.
In this article, we’ll take a deeper dive into rental protection and its benefits to see whether tenants should consider taking out this type of cover.
What is rental protection insurance?
Before moving into a new home, renters need to go through the tenant application process. Part of this process includes tenant referencing, which is where a renter proves their eligibility to live in a property.
If successful, renters are given the green light to move in. However, the checks during the tenant referencing stage are only reflective of their financial circumstances at that moment.
Rental protection offers financial stability in the event that unforeseen circumstances mean tenants can’t pay their rent during a tenancy. It adds that extra peace of mind, just in case something unexpected happens.
Different types of rental protection income insurance
The crux of rental protection insurance boils down to receiving protection in the event where you are unable to pay the rent. Most types of cover are presented in different categories:
- Rental income protection benefit provides regular monthly protection that can be used to cover rent payments if you are unable to pay them, whether it’s caused by illness or injury that stops you from being able to work.
- Rental life insurance is designed to provide monthly benefits in the event of something as severe as your death. The plan helps surviving family members cover payments.
While none of us are particularly enamoured at the idea of thinking about the worst-case scenario, planning ahead for potential “what-ifs” is better than being left out of pocket – something that could affect yourself and those close to you.
A stronger focus on renter’s insurance
The rising number of houses in the PRS brings with it several insurance considerations. It is clear the mindset needs to change around the perception of renters and their relationship with insurance in the PRS.
Nearly half of all tenants don’t have contents insurance, though some of the reluctance can be noted to living in furnished accommodation – thus not feeling the urgency for such cover.
When it comes to paying the rent each month, however, there are no fallbacks if you can’t afford to make payments.
If you have a 12-month Assured Shorthold Tenancy (AST), you’re committed to paying the full amount. Finding yourself unexpectedly in arrears can affect your tenancy, credit rating, and future chances of renting a home or getting a mortgage.
Why should I get rental protection?
From rental income protection to rental life insurance, having that extra layer of security can be a big help – not just for you but also for your family.
Cover supports you if injury or – even worse – death prevents you and your family from paying the rent. You also get support from a range of services dedicated to helping those who are going through hard times.
With rents in the UK expected to increase by 15% over the next five years, it’s vital that you’re ready for all possible scenarios.
Protecting yourself against unexpected problems comes with the benefit of feeling more secure financially. Rental income protection isn’t mandatory, but tenants who take out this type of cover are far better prepared for future circumstances that they can’t predict.
How can I get rental protection?
The best way to sign up for rental protection is through an insurance specialist. There are several options available, with insurance specialist Legal & General offering plans that provide Rental Income Protection Benefit to tenants.
No matter your current circumstances, it’s always tricky trying to predict what the future holds. Having rental income protection makes things that little bit easier, as you won’t have to worry about finding monthly rental payments during harder times.
And really that’s the most important thing – peace of mind. It’s worth its weight in gold. Or, at the very least, it’s worth protecting yourself against and having the security of rental income protection.
Last Updated: April 26th, 2022