How Loss of Rent Insurance Works
If tenants are forced to move out following an insured event, rental income may be lost. This cover is essential for anyone with landlord insurance. Loss of Rent cover can:
- Replace lost rental income
- Support mortgage or loan repayments
- Work alongside alternative accommodation cover, ensuring tenants are rehoused while the property is reinstated
Rental Income Replacement
Replace lost rental income during property repairs
Mortgage Support
Support for ongoing mortgage or loan repayments
Alternative Accommodation
Works alongside tenant rehousing arrangements
What It May Cover
- Rental income shortfall due to insured damage
- Events such as fire, flood, storm, or escape of water
- Cover linked to the main landlord or block of flats policy
- Indemnity periods typically 12-36 months, depending on the insurer
Exclusions to Be Aware Of
Tenant Arrears
Usually covered by rent guarantee insurance instead
Wear and Tear
Poor maintenance issues not covered
Outside Indemnity Period
Losses beyond the policy time limit
Non-Insured Perils
Events not listed as covered risks
Who May Need It
Loss of Rent Insurance may be relevant for:
Private Landlords
Seeking to secure income streams from rental properties
Portfolio Landlords
With multiple properties requiring income protection
Freeholders and RMCs
Reliant on service charges and ground rent income
Property Investors
Who want to limit financial disruption from property damage. For void periods, consider unoccupied property insurance.
Add-Ons That May Apply
Loss of Rent Insurance is often combined with wider cover, such as:
- Legal Expenses Insurance
- Employers' Liability (if staff are employed)
- Directors' & Officers' Insurance (for RMCs)
- Engineering Cover for lifts or boilers
- Terrorism Insurance
Loss of Rent vs Rent Guarantee
Loss of Rent Insurance
Protects income when property is uninhabitable due to insured damage.
Rent Guarantee Insurance
Protects income when tenants default on payments, regardless of property condition.
Frequently Asked Questions
What is the difference between Loss of Rent and Rent Guarantee Insurance?
Loss of Rent Insurance protects income when property is uninhabitable due to insured damage. Rent Guarantee Insurance protects income when tenants default, even if the property is habitable.
How long does Loss of Rent Insurance typically cover?
Indemnity periods typically range from 12-36 months, depending on the insurer and policy terms.
Does Loss of Rent Insurance cover tenant arrears?
No, tenant arrears are usually covered by rent guarantee insurance instead, not Loss of Rent Insurance.
