Tuesday, December 27, 2022
Inmuebles Alquileres

How Homeowners Rental Insurance Works?

The best way for a landlord to be calm when renting a flat is to take out rent non-payment insurance. The star guarantees are those that cover the non-payment of rent, but the policies cover much more than that: they advise the owners on any issue related to the lease or the tenant, and cover all legal expenses related to the rent.

What is rent default insurance?
It is a legal defense insurance that protects the owner from any problem that may arise with the rental of the property, from defaults to discrepancies with the tenant about who should pay for the repairs. The expenses of lawyers, solicitors, are guaranteed.

In addition to taking care of the monthly payments, the insurance tries to mediate with the tenant from the first month that he stopped paying, warning him of his own obligations. And, in the event that an agreement cannot be reached, judicial mechanisms are invoked, although the owner may be unaware of the process. If the eviction is ultimately settled, the policy will also compensate for vandalism and pay for house cleaning.

Why buy rent delinquency insurance?
For peace of mind. If there is a problem, insurance will be there to fix it. Insurance companies have professionals specialized in leasing, so any management that has to be carried out is carried out as quickly and as agilely as possible. Of course to save money. A nonpayment claim can involve a substantial fee that adds to the loss of income from unpaid rent. With a premium, everything is covered.

What does insurance usually cover?
There are insurances that protect the owners of rental flats against any unforeseen event, even in the event of non-payment. But what does the policy include?

• Advance rent in case of non-payment, up to 12 months, from the processing of the claim, with retroactive effect and regardless of the first month in which the coverage was exceeded.
• Defenses and claims in case of breach of contract
• Compensation for vandalism to the continent in case of eviction, with the possibility of extending it to the content
• Lock jacks and locksmith in case of eviction
• Home cleaning expenses in case of eviction
• Criminal liability defense
• All legal expenses and fees included in any administrative management associated with the rental
• The insured can also use telephone legal services to resolve any legal issue.

How much does rental insurance cost?
The price of rental non-payment insurance depends on the service that each client contracts, since the policy is flexible and can be adapted to the needs of each owner. For example, owners can choose how many months they want the insurance to cover in case of non-payment (normally 12 months), or if we want to cancel the excess of the first month of prepaid rent.

On average, rental insurance will cost between 3% and 5% of the annual income earned by the owner.

What should I take into account before hiring rental insurance?
A solvency study must be carried out on the tenant before contracting rent non-payment insurance. It is a good idea to do this research before signing a rental agreement: it will be easier to ask the tenant for documentation, and if the research is rejected, a solution can be found, including more documentation or a guarantee.

Tenants cannot spend more than 40% of their combined net income on rent, and one of them must be permanent, have a trial period, or have worked for the same company for more than a year. A security deposit may be added to the studio if the tenant has insufficient income or seniority.

Necessary documents for signing unpaid insurance
At this point, we have to specify the type of file according to the professional activity.

If they have a salary, the required documents are:
• The last three payslips
•    Work contract
• Application document signed by the tenant (data protection law document)

If they are self-employed, they must:
• Personal income tax
• The last two self-employed payments to Social Security
• Application document signed by the tenant (data protection law document)

If they are retired:
• Pension certificate issued by Social Security
• Application document signed by the tenant (data protection law document)

Therefore, if you want to rent your flat with the monthly installments guaranteed by your tenants, you must take out good insurance for your home. This will make you forget about possible problems, because they will be on the side of the owners, defending and defending their rights.

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