One of the reasons why many landlords decide against putting their property up for rent is precisely to avoid the risk of non-payment.
Certain types of insurance specifically focused on rental properties have arisen from this need, which offer not only protection in case the tenant stops paying rent, but also provide specific coverage for this type of property, where legal defense is included.
In Lasose Properties & Investments we tell you if it is worth taking out an insurance policy for non-payment of rent.
The truth is that there are a series of certain steps to follow in order to rent out a property securely. For example: checking the solvency of the tenant, asking for extra guarantees, or renting the property through a real estate agency that will help to ensure the best profitability from the property throughout the whole process. However nobody is exempt from incurring problems of default on the part of the tenant, nor from having damage done to their property.
For this reason, more and more landlords are opting to take out rent default insurance to protect them if this type of situation happens.
How does non-payment of rent insurance work?
- The insurance will cover the payment of the rent that the tenant has not paid, up to the maximum of the number of monthly payments that has been established in the insurance policy.
- It may also cover the damage or material damage caused by the tenant, according to the limits established in the policy.
- And it will offer legal assistance to resolve any doubts related to your rights and obligations.
In addition to the above, this insurance comes with an extra guarantee, since before granting the policy the insurance company carries out its own solvency study of the tenant to verify that s/he will be able to make good on the monthly payments.
For all these reasons, the non-payment of rent insurance is worth taking out, to guarantee the landlord’s peace of mind and protect against any risk involved in renting out a property.
