Tenant Default Guide - PropGuard

Tenant Default Guide

1. Initial Contact

Communicate with the tenant immediately to understand the reasons for non-payment, such as financial difficulties or disputes.

2. Formal Notice

Issue a legal notice requesting payment, such as an N4 form in Ontario or a Section 8 notice in the UK, adhering to local regulations.

3. Negotiation

Attempt to negotiate a payment plan or resolution with the tenant to avoid escalation, documenting all agreements.

4. Legal Action

If unresolved, proceed with eviction or recovery proceedings through local courts or tribunals, ensuring compliance with legal requirements.

Waiting Period (First 90 Days)

Most rent guarantee insurance policies exclude coverage during the initial 90 days after policy inception.

Exceptions may apply for policies with continuous coverage from a prior provider.
Purchasing the policy early (before tenant issues arise) maximizes coverage potential.

Reporting Requirements

Arrears must be reported within 31-60 days, even during the waiting period, to maintain eligibility for claims.

Claim Process

Submit a claim with documentation, including tenant agreements, payment records, and legal notices, to initiate coverage.

Scenario	Coverage
Arrears before policy start	Not covered
Arrears within first 90 days	Usually not covered
Arrears after 90 days	Covered (if compliant)

Important Note

Always complete proper tenant screening and maintain valid documentation to ensure eligibility for insurance claims.

10 Rent Guarantee Claims Guide - PropGuard

How Rent Guarantee Insurance Handles Claims During the First 90 Days

1. Waiting Period ("Deferral Period")

Many rent guarantee insurance policies do not cover claims made within the first 90 days of the policy or tenancy start date. This waiting period is designed to prevent adverse selection and ensure the insurer is not immediately exposed to pre-existing tenant issues.

Exceptions: Some insurers may allow immediate coverage if the landlord had comparable cover for at least six months prior or if the policy was purchased within ten days of the tenancy agreement starting.

2. Reporting Requirements

Even if a claim cannot be made within the first 90 days, landlords are often required to report arrears or defaults as soon as possible, usually within 31–60 days of the event, depending on the policy. Late reporting can result in a claim being denied or reduced.

Documentation: Landlords must follow the insurer’s claim procedure, which includes documenting attempts to recover the rent and providing evidence of tenant screening and compliance with legal requirements.

3. Claim Process After the Waiting Period

Once the 90-day waiting period has passed, and provided all other conditions are met (such as proper tenant referencing and a valid tenancy agreement), the landlord can submit a claim for rent arrears.

Excess and Deductions: Some policies may deduct the first month’s rent from the claim payout or only pay out after a certain number of missed payments (e.g., two full months of arrears).

Key Points to Remember

No Retroactive Coverage: Rent arrears that accrue before the policy starts or during the waiting period are not covered.
Compliance: Landlords must have completed all required checks (credit, affordability, deposit protection) and have a valid tenancy agreement for the claim to be valid.

Scenario	Policy Coverage?
Arrears before policy start	Not covered
Arrears within first 90 days	Usually not covered
Arrears after 90 days	Covered (if compliant)
Late reporting of arrears	Claim may be denied

Summary

Rent guarantee insurance typically does not pay out for claims made within the first 90 days of the policy or tenancy, except under specific conditions. Landlords must report arrears promptly and ensure all required checks and documentation are in place for a valid claim.