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New rent guarantee launched by Direct Line Landlord Insurance

To help safeguard landlords from losing out on rental income, Direct Line Landlord Insurance has launched a new rent guarantee product that offers to reimburse landlords if the tenants occupying their property fail to pay the rent.

For some buy-to-let landlords, rent guarantee insurance is a vital part of their business protection toolkit, as it offers help with the cost of legal expenses and lost rent when a tenant falls into arrears and eviction is the line of defence for the landlord.

Direct Line’s policy option, which costs £72.80 per property for 12 months’ cover, is an optional extra as part of legal expenses cover. Once the tenant has not paid rent for one calendar month and the relevant Section 21 or Section 8 notice has been issued a policyholder can claim.


The legal expenses cover pays up to £250,000 for legal costs and expenses in dealing with disputes that can result from renting out your property. This includes cover for such issues as eviction of squatters, debt recovery and tax protection. 

If, after the landlord gains possession, they find damage has been caused by the tenant, the cover will pay 50% of the rent they would have previously received while the repairs are being made, for a maximum of three months or until the property is let, whichever happens first

Gary Holmes, product manager at Direct line for Business, commented:  “No matter how carefully landlords vet their tenants, problems with unpaid rent can still arise.  It may be that a tenant finds their circumstances change significantly, such as losing a job or being unwell and are therefore unable to fulfil their original commitments, but landlords still need to earn an income or keep up with monthly mortgage payments.

“To help take away the stress of rent arrears, our optional rent guarantee insurance pays the unpaid rent while tenants or ex-tenants are still in the property. Once the claim has been accepted, landlords will also be covered for the costs and expenses of repossessing the property.”

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