2018 rolled out the carpet for some much-needed changes within the insurance industry. In the wake of ever-present modernisation, it now seems that the standard deposit system is becoming a thing of the past and, unlike video stores and hardcopy books, it isn’t something many people will look back on fondly.
If you consider the statistics this is hardly surprising – the average cost of a tenancy deposit is generally equivalent to six weeks’ rent and, according to ARLA Propertymark, rent prices are only on the rise. So, as reported by the Tenancy Deposit Scheme, this lands the average cost of a deposit at £1,041 for England and Wales, whilst the London average has climbed to an eye-watering £1,750.
This has not gone unnoticed. To combat these mammoth costs, the government are planning to put a cap on tenancy deposits at being equivalent to maximum of six weeks’ rent, as well as banning letting agents’ fees. However, these changes have been heavily criticised as inadequate and, to add fuel to the fire, won’t be implemented until spring 2019, leaving many residents bitterly disappointed. When coupled with the fact that residents normally need to provide a deposit before the return of their previous deposit, it is easy to see why tenants are welcoming the chance to shun them altogether.
The purpose of a deposit replacement scheme is basically to replace the standard deposit payment with an insurance policy. This policy provides landlords with the same protection as a deposit, but effectively removes the requirement of an expensive lump sum prior to tenancy. This makes it more affordable for tenants to move, but not at the expense of their landlord’s protection. Instead, deposit replacement firms ask the tenant for either an non-refundable, upfront fee (usually the equivalent of one weeks’ rent), or for an additional small sum to be paid alongside their rent every month. The policy holds the tenant liable for any damage at the end of their tenancy, and will recover these costs from the tenant, whilst guaranteeing to cover damages for the landlord.
There are many insurance products available on the market today, all of which include the many benefits of a deposit replacement scheme. Residentsline, an experienced property insurance broker, have recently developed a deposit replacement scheme that stands out as one of the most cost-effective schemes on the market.
Residentsline’s scheme, underwritten by Legal Protection Group Ltd., does not require one weeks’ worth of rent or monthly payments. Instead, they have developed an annual insurance policy, one which not only provides all of the benefits of a deposit replacement scheme, but has been tailored to also be able to include Rent Guarantee AND Landlord Emergency Assistance.
Rent Guarantee is a practical addition to Residentsline’s deposit replacement policy. It provides cover for landlords towards any unpaid rent. So, should a landlord find themselves in a position where rent is overdue for at least one month, Residentsline will shoulder the cost to ensure the landlord is paid the full sum. Their policy will also pay the landlord the value of one months’ half-rent for a subsequent three months if the property is damaged and cannot be immediately re-let.
Towards the end of a tenancy it goes without saying that all parties involved would prefer the cessation go smoothly. However, there are many occasions where this simply is not the case -conflict can arise over issues such as property damage, rent payments and even repossession of the property. Residentsline’s policy is tailored to cover you against these conflicts no matter how challenging the situation may be. Should there be difficulty when repossessing the property, Residentsline will provide the landlord with cover for up to £175 per day towards the cost of their alternative accommodation plus £15 a day towards the cost of storing their possessions. They will also provide legal expenses cover for rent recovery, property damage, alleged breaches of contract, eviction, and legal nuisance and trespass disputes. Should these disputes reach the court, Residentsline will even cover the value of lost salaries for the time taken off work. For such a small annual sum, this policy provides impressively comprehensive cover.
If Rent Guarantee wasn’t enough, Residentsline’s inclusion of Landlord Emergency Assistance makes their policy one of the most comprehensive policies on the market. Whilst property disputes are certainly difficult, accidents and emergencies are something that neither the tenants nor the landlord can control. Luckily, Residentsline’s bespoke policy covers against accidents and emergencies; giving protection at a time it is needed most. Any failures to the property’s heating, electric, plumbing or gas supplies are insured, on top of cover for pest infestations and damage to windows, doors or locks. Should you break the keys to the property or lock them inside, Residentsline will appoint an authorised repairer to carry out emergency repairs and cover any damage caused in gaining access to the property as well as paying the repairer to make the property safe and secure. The policy also covers any damage to the roof caused by adverse weather conditions or fallen trees as well as the cost of one night’s accommodation should the property be uninhabitable following an emergency.
With such comprehensive cover and protection against an impressive range of incidents, it is clear to see how Residentsline’s Deposit Replacement policy is holding its own within the insurance market. It is a modern policy which has been carefully tailored to suit the needs of landlords and tenants, as well as cover against the unexpected and, for such far-reaching cover, it still comes with the most competitive prices available. With standard deposit schemes being in such dire need of re-thinking, it is refreshing to see that there is an insurance broker within the industry who is more than up to the challenge.