Landlord rental protection insurance protects the rent against the tenant rather than against the building. That distinction is the whole product: it responds when a tenant who can pay does not, or cannot, and it does not respond when the property is uninhabitable, which is loss of rent under the buildings policy.
What is being protected
The monthly rent under a written tenancy, from the point arrears reach the trigger, for a stated period. Usually with the legal costs of recovering possession, and sometimes with a reduced percentage continuing while the property is relet. It protects income, not the property and not the deposit.
Against what
A tenant who stops paying. Not a tenant who leaves lawfully at the end of a term, not a void while the property is marketed, and not arrears that existed before the policy started. The distinction between a tenant who will not pay and a property that cannot be let is exactly where landlords most often expect cover they do not have.
The conditions that attach
Referencing to the insurer's standard before the tenancy began, including income verification, a previous landlord reference, a credit check and a properly executed guarantee where a guarantor is used. A written tenancy. A protected deposit with prescribed information served. Prompt notification once arrears reach the trigger.
Whether to buy it
It is a judgement about your own balance sheet. Where several months without rent, while a mortgage continues and a possession action runs, would be a serious problem, it is worth the premium. Where a portfolio can absorb the occasional bad tenancy, self insuring across the properties is usually cheaper over time.
Questions people ask about landlord rental protection insurance
What is the difference from loss of rent?
Loss of rent responds when the property is uninhabitable after an insured event. Rental protection responds when the tenant stops paying.
Does it cover a void?
No. A period between tenancies produces no rent and no claim. That is a commercial risk.
What conditions must I meet?
Referencing to the insurer's standard before the tenancy, a written tenancy, deposit protection with prescribed information, and prompt notification of arrears.
Is it worth it?
Where several months without rent while a mortgage continues would be a serious problem, usually yes. Larger portfolios often self insure instead.