Rent non-payment insurance is one of the mechanisms that many users seek to have peace of mind when they rent their home. The ambiguity in the legislation and the difficulties, in some cases, to expel the tenants means that a large number of citizens who have rented properties want to be calm with the payment of the monthly payments.
When talking about insurance for rental homes, one thinks only that the policy addresses the intentional damage that could be caused by tenants and legal defense if there are legal problems, such as an eviction. However, some of the rental insurances also offer coverage for non-payment of rent more and more frequently.
If the tenant stops paying the rental fees, the owner will continue to collect them during the time he has contracted in his non-payment insurance policy. These insurances for non-payment of rental income are on the rise and therefore it is necessary to take into account the following tips before hiring.
Going to the concrete, non-payment rental insurance is an increasingly common and necessary tool when renting a home. With which, if you are the owner of a rented apartment, you are interested in continuing reading this article.
Currently, the Urban Leasing Law (LAU) does not include any clause that requires the contracting of this type of insurance. However, it is important and highly recommended to have insurance that fully covers damage and non-payment.
In this way, you can already imagine what non-payment insurance is. Indeed, it is a policy that protects the owner of a rental home against possible delinquent tenants who do not pay the monthly rent or who cause some type of damage to the property.
A differential factor on which to focus when contracting rental non-payment insurance is the duration of said policy. Default insurance can vary, since they allow you to choose the months you want coverage. However, insurance companies usually offer between 6 months and a year of coverage (12 months).
The term will be determined by the time in which you will be covered in case of non-payment, regardless of the duration of the rental contract. With which, it is important to choose the duration of the insurance well to be protected from any damage and non-payment.
In this sense, there are insurers that offer coverage of up to 18 months. Our recommendation, if you want to guarantee rent collection, is to choose as much coverage as, in the event of non-payment or eviction, the process could take a long time.
Since there is no law that regulates this type of insurance, there is the option that the owner or the tenant pay it. Thus, the main recommendation is that the owner take charge, since he can obtain greater benefits. Likewise, in the event that the tenant stops paying the monthly installments, it is most likely that they will also ignore the insurance payment and, therefore, you will lose coverage.
Therefore, one of the keys is that you are in charge of comparing the different insurers and assume the entire amount of the insurance.
It is vital to see the contract you are going to sign in detail. Just like when you sign a mortgage, the fine print matters a lot in rent default insurance. We must be careful, since there are false rental insurance.
In this way, to select the best rental default insurance, it is essential to verify that it is marketed by an insurer or through an authorized mediator. One of the keys is to be wary of insurers that have few requirements for tenants, since generally, one of the most important conditions when taking out insurance is that the insurer studies the solvency of the tenant as they will be able to face the Payments.