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How Does Unpaid Rent Insurance Work?

Whether you are renting long-term or on a seasonal basis, you know that there are specific rules that must be respected. However, you may encounter financial difficulties when the tenant does not pay his rent. To avoid this kind of situation, there is a very simple solution by subscribing an unpaid rent insurance.

When you rent a property, you might encounter issues with unpaid rent.

How to find the best rental insurance?

As a landlord, the loss of income can be considerable when a tenant fails to pay rent on time. In addition, you may feel that recourse is limited and time consuming. So to avoid unfortunate events, some protection is needed by choosing rent insurance.

The definition of the unpaid rent insurance

If you want to rent with peace of mind, don't ask yourself this question and look into rent guarantee insurance. It is a particularly practical type of insurance and you can be sure that you will receive your income even when your tenants fail to pay their rent. As with any type of insurance, there are specific conditions with varying options. But the coverage is meant to be quite comprehensive and in this case coverage applies no matter what your situation is.

Some insurance packages cover all situations and all you have to do is pay an additional premium up front. In all cases, it is important to read the terms and conditions of the contract in detail and to discuss them with an expert.

What are the different services included in an unpaid rent insurance?

As with any contract, you need to be careful from the outset to make sure you are going in the right direction. Therefore, check the reviews of the rental insurance to see if the insurer is trustworthy.

If they are, you will benefit from various services that are directly included in the GLI.

  • First of all, you will find an indemnity concerning unpaid rents. As a landlord, you benefit from an advance payment if you ever find yourself with a defaulting tenant.

  • But the insurance goes even further, this time you will be reimbursed if you suffer any damage to the property. Unfortunately, damage to the property can happen and it is a particularly heavy financial burden. But with your insurance, you know that a restoration applies.

  • Then there is also the legal protection. Additional peace of mind if ever a legal procedure has to be launched against a bad payer. This includes both the costs of police intervention, if you have recourse to a locksmith, a lawyer or a bailiff.

  • Finally, it should be noted that the unpaid rent insurance is particularly practical in case of premature departure. Once again, the role of the insurer will be absolutely decisive in covering unpaid rent. This is the case when a premature departure has been recorded or in case of death.

Moreover, it is important to know that the subscription to such a contract is not an obligation. It is an option to consider, with an additional cost, but in case of problems, the insurance is profitable.

What is the price of an unpaid rent insurance ?

You have found a rent insurance and you would like to know how much it costs? Of course, you should know that the cost is not negligible, as it usually represents 2.5 to 5% of your annual income. But essentially, there are two parameters to keep in mind when defining the amount.

Obviously, the amount of the rent which will be directly written in the lease. This obviously includes the charges, when there are any.

All the details about the amount of rent is marked in the rental contract.

Finally, the options you are interested in, i.e. the one you are going to subscribe to. The management and the verification of the lease file or the guarantee of degradations.

Even if its cost is not negligible, the GLI insurance is absolutely essential from the moment you need to establish a rental contract. In fact, there are always risks with this type of investment, especially if you come across a bad payer. But if that happens, you'll be greatly relieved because insurance will help you anticipate the risks.

The opportunity to trust UpperKey

If you want to make an investment in the best possible conditions, you can be sure to choose UpperKey. A company specialized in property management. Whether it concerns a property on Airbnb or a traditional rental, you will find a reliable partner who will take care of the rental of your property. You don't have to worry about finding a tenant, studying his profile and managing the different administrative steps.

It is a turnkey service which will be synonymous with peace of mind. An excellent opportunity to make your real estate investment profitable. So if you would like more information about the UpperKey agency, do not hesitate to contact us immediately.

If you'd like a stress-free rent, you should consider working with a property management company like UpperKey.

What is the right way to take out an unpaid rent insurance policy?

Of course, the home insurer may require specific conditions for the subscription of such a contract.

First of all, you will find all the terms and conditions that are directly related to the accommodation. If it is the tenant's main residence, the guarantee also applies to residential premises, whether it is a studio, an apartment, a pavilion or a house. However, the subscription of such a contract will not be possible on commercial premises, second homes, company housing and seasonal rentals.

Concerning the amount of the guaranteed rent, a maximum ceiling will be defined anyway by the insurer. Generally, it is between 2000 and 2500 €.

Then, the other guarantees relate to the solvency of the tenant. In the event of non-payment by the occupant, it is imperative that the latter be solvent. Various documents must be presented by the tenant corresponding to the last three pay slips and these must be 2.85 times higher than the amount of the rent. He must also define the nature of his employment, whether it is in the form of a fixed-term contract or a permanent contract. Then these last two tax notices, an identity document, a bank account number and a specific certificate when the latter benefits from the APL from the CAF.

If you go through a serious rental agency, these various supporting documents will be presented at the beginning.

If, on the other hand, the tenant is an apprentice or a student, a deposit commitment will be required instead of the salary certificates.

Now you know how unpaid rent insurance works and its many advantages. When it comes to renting, it is better not to take any risks and to take out an additional guarantee to avoid any disappointment. In this regard, do not hesitate to seek the help of the UpperKey agency.

You will be surrounded by real specialists who will have no trouble managing your property.

Start earning more rental income today by contacting UpperKey

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