Renting out a property entails a series of risks that can range from non-payment of rents to the destruction of the furniture or the structure. Unfortunately, specifying certain restrictions and obligations in the contract does not always prevent certain mishaps.
What is covered by rental guarantee insurance?
Generally, rental guarantee insurance generally provides coverage for three possible risks faced by the owners of the property:
- Risk of non-payment: the insurance company will be in charge of covering the total rent that has not been paid by the tenant in most of these types of contracts. It must be taken into account that in order to receive the money there must be a definitive judicial resolution that demonstrates the tenant’s default.
- Legal defense: the insurance company usually covers legal defense and other legal expenses.
- Vandalism and damage to the property: in this case the insurer will only cover the damages caused by the tenant at the time when the tenant is evicted. In other words, it will not cover damages that have occurred during the rental period.