Vanity or Sanity

Insurance matters

The last topic of this month’s article relates to insurance, both contents and rental guarantee.

Contents to begin: it is highly recommended to put in place a contents and accidental damage insurance policy, which generally speaking cost somewhere in the region of £200 per annum for £10,000 worth of cover. Bear in mind that even if a property is unfurnished it is wise to have the cover as the general fabric of the property could be costly to repair or replace, such as windows, bathroom suits etc. This cover is taken in addition to any tenants’ deposit which is generally equal to six weeks rental. Why? Well in the event the tenant decides not to pay his last month’s rental then there simply may not be enough protection in place. “Belt and braces” yes, but wise in my experience.

Do not mistake this insurance with buildings insurance which is normally paid through your service charge and merely protects the actual building itself against flood, fire, movement etc. Furthermore, content’s insurance for rental property is specific as many insurers will not offer this. CRPI are able to introduce a numbers of insurers who can facilitate this.

Rental guarantee insurance: whilst we have a stringent referencing process sometimes tenants fall into difficulty and are unable to meet there financial obligations. As we all know, circumstances can change.

Again, it is highly recommended to obtain rental guarantee insurance and here at CRPI this comes as standard and free to all clients in the first year of every new tenancy.

This insurance will cover loss of rental income and will pay out immediately upon the occupant falling a total of 60 days in arrears. So by way of example, if your tenant had signed a 12 month contract and fallen into arrears in month three you will receive the balance on rental due for the term of the agreement, 9 months. The typical cost of this premium is circa £160 per annum with no excess.

CRPI have a bespoke product and can facilitate this for any tenancy, even if not under management, subject to references.

Next month I shall be addressing topical issues such as gearing, rent levels, corporate tenancy and inventory / property inspection. Should you wish to get in touch or have any questions please do visit us at www.completerpi.com