Landlord: How Rent Default Insurance Works
If you own a rental home, taking out non-payment insurance is an obligation , especially in cities like Madrid and Barcelona.
With the upcoming New Housing Law it is better that you have all the tools at hand to protect your property, your rent and your property.
Although leasing your home is and can be very profitable, it is a business like any other, where you must advise, inform yourself, consider strategies and look for all the ways to protect your property, your investment and profitability.
Only 4 out of 10 Spaniards with rented homes know what rent default insurance is or how it works.
Emphasizing “Protect”, real estate agents are aware of these problems and offer the owner non-payment insurance with guaranteed rental income in a certain time to protect their home.
What is rent default insurance?
Default insurance kicks in when a tenant doesn’t pay their rent on time or at all . This service offers complete coverage of the rent of the owner’s home for rent.
It gives the owner confidence, security and protection to rent his home to a stranger, protecting him from cases of delinquency, late payments or problems that may arise with the tenant.
Why should the owner take out non-payment insurance for his home rent?
In conclusion, owners often have problems and non-payment of rent insurance is one of the most important tools that completes this protection.
In October 2022, Insurtech Lovys conducted a survey on Non-payment of Rent in Spain, which found that 66 % of rental homeowners have experienced non-payment of rent by the tenant on some occasion .
The same survey also found that only 4 out of 10 Spaniards with rented homes know what rental non-payment insurance is or how it works.
With which, non-payment problems, or friction with the tenant, are part of the frequent problems that owners have to face.
How do owners usually protect themselves?
The owners usually defend themselves against these inconveniences, by asking the tenant for their bank or personal guarantees, as well as the payment of a deposit of one or two monthly rent payments.
The best way to protect the owner’s rental home is with a Comprehensive Rental Management
But this strategy, although it is good, is insufficient, so default insurance protects your investment.
But, the best way to protect the rental home from the owner is with a Comprehensive Rental Management.
Complete coverage of legal defense, incidents and damage to the home, selection of tenants, problems of coexistence with the neighbors, and of course, non- payment insurance with guaranteed rent without monthly payment limits and more.