Seguros y pensiones para todos

Renting your home: say goodbye to unpleasant surprises

Renting your home: say goodbye to unpleasant surprises

Home > Blog > Renting your home: say goodbye to unpleasant surprises

If you're thinking of renting your home but you're afraid of defaulting tenants, we propose some tools to protect you.

What happens when the tenant of a house stops paying the rent to the owner? Obviously this represents a serious economic loss, but it is also an unpleasant situation that causes a lot of stress, wasted time and worry. In fact, along with potential material damages, this is the main reason that makes homeowners think twice about renting a property.

Insurance against uncertainty

As is already the case in many other everyday situations that worry us, the insurance world has managed to come up with a response to this concern: the formula is called “rental protection insurance” or “unpaid rent insurance”. It is a very effective tool that is also changing the traditional mechanisms that owners used to use to protect themselves against defaults.

The usual thing was for property owners to ask potential tenants for personal guarantees or bank guarantees. However, this system is very expensive and not always easy for the tenant to obtain, even if they are completely solvent. Therefore, rental protection insurance is replacing bank guarantees to provide an additional guarantee to the cash deposit stipulated by the Spanish Rent Act.

Non-payment and damages

In this way, if the tenant defaults or causes damage to the home, the insurance company will cover these amounts according to the amount of unpaid monthly payments stipulated in the policy and any intentional damages that may have been caused.

Choosing the ideal tenant

In order to offer this service, insurance companies establish several general requirements: firstly, the tenant must prove – by providing the relevant documentation – that they are not registered in any database of debtors; they must also provide proof of economic solvency and that the annual rent does not exceed 40-45 percent of their net annual income. This also benefits the property owner, since the insurance company helps to make the optimal selection of the potential tenant of their property.

In addition, this type of insurance also usually offers coverage associated with the defense and protection of the owner’s interests (disputes arising from the contract and evictions), and any type of urgent home repair.

You may also like…

The 7 stages of financial freedom. Which one are you in?

The 7 stages of financial freedom. Which one are you in?

Dividing that journey into stages will help you gain perspective on where you are and how stable your personal finances are. It will also help you see your progress much more clearly and keep your motivation high. There is no one single way to divide up these stages...

Life insurance and the theory of decreasing responsibility

Life insurance and the theory of decreasing responsibility

In other words, these policies allow you to plan your finances and get the level of protection you need at any given moment. For this very reason, the question of when it is advisable to take out a life insurance policy goes hand in hand with specific phases of life,...

5 tools for saving money on your inheritance

5 tools for saving money on your inheritance

The big difference is that you know when you have to pay your taxes, but you don't know how much time you have to plan your inheritance. The solution? Do it as soon as possible so that nothing is left to chance. This is how you can really save your loved ones time and...

New ways of taking out insurance, same efficiency

New ways of taking out insurance, same efficiency

Digital channels play an especially important role in the early stages of the purchase decision. Currently, approximately 75% of consumers search online for information about car and health insurance and almost 60% look for home, life and savings insurance, according...

Alexa and OK Google help you with home insurance

Alexa and OK Google help you with home insurance

Adjusting lights, changing the temperature and activating alarms can be done without having to lift a finger: virtual assistants like Alexa and Google respond to our voice and can be used to control these functionalities, making them more direct, immediate and simple....