The Rent Default Insurance is a very affordable insurance product, considering the very high level of economic protection it provides to owners of rented homes.
And this type of insurance not only covers possible unpaid monthly payments, but its beneficiaries are entitled to receive multiple additional benefits.
Specifically, these are the coverages and complementary benefits of a rental insurance, beyond the non-payment of rent:
- Coverage of possible damage to property
It is not uncommon for tenants who do not pay and end up being evicted to not accept the situation well and cause great damage to the home, with the sole purpose of economically harming the landlord. And it also happens that, whether or not all rents have been paid, at the end of the contract the owner finds that the home is in a deplorable state of conservation and/or hygiene. In either case, the rent default insurance will compensate the owner for all expenses of restoring the home to its original state, including cleaning and comprehensive sanitization tasks.
- Legal protection
Another significant advantage of rent default insurance is the legal protection it provides to landlords of homes and premises. In this sense, all expenses for claiming unpaid rents are fully covered by the insurance. This includes expenses related to lawyers and solicitors, in the event that it is finally necessary to execute an eviction procedure.
That is, the owner has the assurance that they will not have to advance any money to enforce their rights over the rented home.
- The possibility of defaults is reduced
Obviously, the insurance company is most interested in there being no rent defaults, since in such cases it will have to compensate the owner. To this end, insurance companies carry out a prior (and very thorough) analysis of the solvency of potential tenants. This implies that tenants who pass this prior screening are financially reliable, which significantly reduces the probability that they will stop paying rent.
A very affordable insurance
Contrary to popular belief, one of the greatest advantages of rent default insurance is its affordable cost: depending on the company and the financial profile of the tenant, the price of the policy ranges between 3% and 5% of the annual rent.
As an example, for a rent of 500 euros per month, the annual cost of the insurance will be between 180 and 300 euros. That is, it will only represent an additional expense of between 15 and 25 euros per month.
The final conclusion is that considering the level of protection that this insurance provides to landlords, we are talking about a cost that could almost be described as negligible. In addition, the owner always has the option of counting on that added expense in advance and adding it to the amount of the rent.
