Following the introduction of new rules on rent arrears as part of the Renters’ Rights Act, which came into force last week, two insurance providers have partnered to provide landlords with an industry-first, they claim.

The duo will offer an alternative rent guarantee insurance protection product that allows landlords to select a cover limit equal to their monthly mortgage payment or to take their full rental payment.

The partnership between Addept Insurance Services (Addept Insurance) and specialist property insurance provider First2Protect, will provide additional flexibility for covering monthly mortgage or rental payments in the event of a tenant defaulting on their rent.

By providing a tailored version of Addept Insurance’s Rent Protect product, First2Protect will enable landlords to cover their mortgage payment or the full rent if they prefer, it says. Current rent guarantee insurance products only provide cover for the full rent as standard, with no option to focus indemnity on the mortgage payment exposure instead. 

Protecting against exposure to mortgage arrears

Following the changes introduced by the Renters’ Rights Act, landlords will be more exposed to mortgage arrears resulting from unpaid rent, as well as potentially facing higher legal fees associated with the eviction and repossession of their property. The changes in the act mean that tenants now have longer to repay rent before an eviction process can begin.

Rent Protect is being provided as an add-on or standalone product as part of First2Protect’s dedicated landlord insurance offerings. It provides a £50,000 cover limit per insured event for repossession and eviction of squatters and up to £3,500 per month to cover mortgage payments and rent arrears for a maximum of 12 months.

Richard Finan, managing director of Addept Insurance, said: “With the implementation of the Renters’ Rights Act, the role of rent guarantee insurance has never been more important. Against a backdrop of anticipated increases in levels of rent arrears and eviction costs, which will inevitably result in an upward pressure on rent guarantee insurance premiums, our partnership with First2Protect provides landlords with innovative and affordable protection.” Mark Batten, managing director of First2Protect, said: “Addept Insurance’s understanding of the new and emerging risks facing landlords from the Act makes them a perfect partner to enable us to respond to the changing private rental sector landscape, providing our landlord customers with a solution that ensures continued affordability and protection against the elements risk exposure of most concern to them.”