Insurance Cover for Rental Income

P

prospero

Guest
Hi, as new to askaboutmoney and buy to let investments, I wonder if anyone can help me with the following?
I have just purchased a house in a new development as an investment, which I intend to let out, with the rental income hopefully covering the mortgage repayments.
My broker advises me that my household insurance would cover the loss of rent if the house became uninhabitable following a fire.
However he has told me that the standard policy will not cover loss of rent, if the tenant simply stops paying, for whatever reason.
I understand that with the PRTB process now in place, the process of removing a defaulting tenant could take up to a year.
With no rental income and the ongoing need to make monthly mortgage payments, does anyone know if you can get an insurance cover for this situation?
 
www.rentassured.ie im not affiliated ,was looking at it today myself got a quote for 560 euro for the year to insure a 1200 monthly rent,they require a letting agreement to be in place also to be registered with prtb and a ref. from tennents employer (tennant must have a f/t job )they wont pay the first missed month but wiill pay from there on for up to 12 months.theres also some cover with regard to sol/legal ,but say its only for a situation outside the remit of prtb ,so maybe thats a cop out ?? still thinking about it.was sad to see they dont do commercial which i was hoping for .....let me know how u get on .
 
Thanks setmeupjoe, I've been looking for rent insurance. Letting agent arranged on a couple of properties I have in the UK but couldn't get it here. A work colleague lost nearly €10,000 last year - PRTB eventually got the tenant out but it took 8 months and a lot of grey hairs, a cancelled holiday and much groveling to the building society.
I had a look at the site - the other main problem is that you can only arrange with new tenants and must do it within 21 days - seriously worth considering when my tenants change.
 
The insurance cost would appear to be incurred in the course of your renatal business and therfore should be fully deductible.
 
Rhino 1 said:
The insurance cost would appear to be incurred in the course of your renatal business and therfore should be fully deductible.
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I wonder, would this mean if one had reason to claim on the policy, would payments from the insurer be subject to income tax the same as rent?
 
gonk said:
I wonder, would this mean if one had reason to claim on the policy, would payments from the insurer be subject to income tax the same as rent?
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Check their FAQs

If you have a tax liability on the rental income which you derive from the letting of your property, the proceeds of any claim payment under your policy are likely to incur a similar liability. Equally we believe you may be entitled to offset the cost of your insurance premium, as an expense against your rental income, which at a marginal rate of 40% could reduce the net cost of this insurance. Please note this is not definitive, and we can-not accept any liability for taxation advice, which should always be referred to your accountant or other expert adviser
 
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