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What is Deposit Replacement Insurance?
Deposit Replacement Insurance is a legal expenses policy which covers you for legal expenses up to £50,000 if there is a dispute with your tenant for damage found following a mid-term inspection or end-of-tenancy check-out.
If the insurer is unable to negotiate a settlement, the insurer will pay up to 6 or 12 weeks' rent for damage and rent arrears.
Deposit Replacement Insurance isn’t just beneficial for landlords. It also makes properties more attractive to renters, as they know they are less likely to be stuck with large upfront costs when starting a new tenancy.
With Deposit Replacement Insurance you can:
Attract more tenants
By minimizing upfront expenses associated with your properties, you can draw in a larger pool of potential tenants for you to pick from.
Increase your protection on every tenancy.
Offering £50,000 in legal expenses coverage and providing payment equivalent to 6 or 12 weeks of rent, you will enjoy greater protection compared to a typical 5-week cash deposit.
Reduce voids and let your properties faster
Promoting properties as deposit-free will generate greater interest and enable tenants to move in swiftly with fewer initial costs, ultimately reducing periods of vacancy.
Increased protection for UK landlords
A tenancy deposit in the UK in most cases is currently limited to 5 weeks' rent which can leave you out of pocket if the costs to repair your property exceed 5 weeks' rent.
Gaining access to money owed to you for repairs is essential for minimising the time it takes to re-let your property. If a tenant disputes your claims, gaining access to a security deposit can be a long process. In many cases, mediators and judges tend to side with tenants, meaning you’re left to cover the cost of repairs and missed rent out of your pocket.
