Non-Payment Rent Insurance Requirements
Requirements for Taking Out Insurance Against Non-Payment of Rent – When we are preparing to rent a flat, at a time when economic ups and downs are the order of the day, protecting our assets becomes a priority. Making sure you receive your rent on time and trying to avoid non-payments can make a big difference to a family’s monthly finances.
When faced with the possibility of such a situation, non-payment rent insurance is an invaluable tool to protect your investment in bricks and mortar.
This type of insurance provides you with security and peace of mind, minimizing the scope that a non-payment by your tenants would have. However, before taking it out, it is necessary to know if there are any requirements to be able to do so.
Remember that non-payment of rent insurance not only protects you against this risk of a pecuniary nature but also offers you legal advice and management services if necessary. Find out how to protect your home with renter’s insurance you can trust.
What are the requirements for taking out renter’s insurance?
As a landlord, the property you want to rent must have a certificate of habitability, guaranteeing healthy and habitable conditions. Sometimes you will find that there may be limits related to the age of the property if it was built more than 50 years ago.
A rental contract and that the rental amount be less than 45% of the tenant’s annual income are other requirements that you may be asked for when you want to take out homeowner’s insurance.
To take out insurance against non-payment of rent, the documentation that will be required of you as the owner will be a completed insurance application form, and you will have to give authorization for the processing of your data. Of course, you will have to provide the deed of sale of the house, and you may need to have a home insurance policy that covers at least the building.
What requirements does the tenant have to meet?
Before closing the policy contract, insurance companies usually carry out an analysis of the potential tenant’s economic solvency. In order to carry out this study, the insurer may request documents that certify the economic viability of the person who is going to rent the property. If the tenant is
- Employed: an employment contract must be presented, the last two payslips are usually requested, and the type of contract will be taken into account, with a permanent contract having more weight than a temporary one.
- Self-employed: the last income tax return and the last two quarterly VAT returns must be attached.
- Pensioner: proof of retirement and a bank statement showing monthly income will be required.
Generally, insurance companies usually check whether the future tenant appears in the main debt collection files in our country.
A renter’s insurance policy gives you peace of mind knowing that the income generated by your rented property is safe.
With all this information, many people decide to take out insurance for tenants, as it has coverage that can greatly benefit the person who will be living in a house that is not theirs and will complement the insurance that the owner may have.
What is covered by non-payment renter’s insurance?
Rent non-payment insurance not only offers coverage in the event of non-payment by the tenant but also provides legal defense coverage related to the rented property.
The tool available to landlords to protect themselves in the event of an unforeseen event with their tenant is a bank guarantee or a deposit equivalent to one or two monthly payments of the rental price, but thanks to this type of insurance, the insurance company undertakes to complete this protection for the landlord and cover certain expenses.
It is usual that coverage for non-payment of rent can be included in a home insurance policy, along with many other guarantees that complete the protection of the property.
Having an insurance policy for non-payment of rent offers the owner greater peace of mind and protection against the risk of renting out their property to third parties. In addition, it is of great help during the tenant selection process since, thanks to this financial study, the claim for outstanding rent is managed and, if necessary, the insurer would take charge of the procedures for the eviction of the property.
Sometimes, the coverage for non-payment of rent is complemented with other insurance guarantees that contemplate the damages that the tenant may have caused to the property, up to the limit reflected in the policy.
Please note that it has a three-month waiting period and an excess that is equivalent to the deposit provided by the client when signing the rental contract.