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.
Deposit Replacement Insurance for Rent to Rent
Utilising Deposit Replacement Insurance as a rent-to-renter will give you many benefits to help your business grow faster.
Firstly this insurance will reduce the upfront cost that comes with taking new properties, allowing you to grow faster without worrying about your cash flow.
The average rent-to-rent agreement is between 3-5 years meaning your deposit is locked in the landlord's account not earning you anything. Inflation is eating away at your purchasing power meaning the value of that deposit is worth less after the term.
Who is the insurer of your Tenant Contents InsuranceOur Tenants Contents cover is underwritten by a panel of cherry picked insurers consisting of Axa, LV, RSA and UK General.
Who should i contact in the event of a claim?In the event of a claim, you should contact your underwriter which will be detailed on your certificate of insurance.
Can i transfer my No Claims Discount (NCD) from another policy?Yes. If there is more than one person named on the policy with two different NCD, the higher can be used I'm sharing the property but the only one named on the tenancy agreement.
Are we all covered by this policy?The policy covers you, your partner and any other person permanently living with you under their tenancy agreement (including any children or foster children). The policy does not cover lodgers or other tenants not covered under your tenancy agreement.
What is the cooling off period for this cover?There's a 14 day cooling off period from the start of the policy. In the event of cancellation after the cooling off period, a pro rata refund will be given if no claim has been made.
What is the most i can claim for one item?The most you can claim for any one valuable is £2,500 unless the item is specified on the policy.
I work from home, is my business equipment covered?"Business equipment is covered up to the sum insured for clerical work only. Business equipment is defined as computer equipment, printers, photocopiers, computer aided design equipment, office furniture and furnishings and telecommunications equipment used in any way for business purposes. This does not include any property held as stock.