The coronavirus and the need for social distance and restrictions have created both a labor and economic crisis. In this context, many people have found themselves in a difficult situation where they could not cope with paying their rent. Given this, many owners, fearing unpaid rent, have chosen to take out rental insurance.
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How has the coronavirus impacted on rent?
The increase in rental defaults is closely linked to the economic and labor consequences generated by covid-19. During the first State of Alarm, non-payment of rent increased up to 380% and this January 2021 we found ourselves in 270% more cases than in January 2020.
These alarming statistics represent that there are many owners experiencing a very complicated situation and many others worried that something similar may not happen to them. For this reason, non-payment of rent insurance has been used .
A solution to unpaid rent
Rental insurance has increased by 4.6% and, not only that, but owners are opting to contract broader coverage that does not focus exclusively on non-payment. In this way, they are more protected against any problem with the tenants.
The most common is that this type of insurance includes coverage in case of non-payment during a certain period of time. But you can extend this coverage to have protection for a longer time and, in addition, you can also have coverage in other aspects such as: DIY, lock changes, income claims, legal advice and defense, repairs and acts of vandalism.
The more you hire, the more expensive the policy will be, but the more protected you will be. It is something that the owner has to weigh and see what suits him best. In addition, the great advantage of taking out a policy is that you can customize it. That is, you can hire different types of coverage to better suit your needs, you don't have to pay for insurance that you don't need.
How do you buy insurance?
You can use a comparator to see what coverage each insurer offers you and at what price, this will allow you to have an idea of the market and how much you could get on average. Once you have an idea of what the average price is, you will have to go to the next step: which is the best?
It is important that we look at opinions or look for references, do not make the mistake of going for the most expensive or the cheapest. The cheap is expensive and the most expensive does not have to be the best. So trust external references, analyze the coverage and prices they offer and the years of experience they have and so you can make the best decision.
What does the unpaid rent insurance ask for?
One of the requirements of an insurer is to be able to choose the tenant and do a feasibility study before signing the lease. Each insurer can request the documentation it deems appropriate to analyze their profile, the most common is that they request: employment contract, work life report or even a bank statement.
The basic requirements that any insurer will ask are:
This process is done to avoid profiles that may pose a risk of non-payment of rent, but as we have seen in 2020, anything can happen. So, in the event that the tenant does not pay, the owner would have to notify the insurer to start the legal processes and begin to cover the insured.
The policy will cover you up to 12 months of rent and, the insurer will claim the rents owed from the tenant and will take care of the legal process such as the filing of the claim or the eviction trial (if necessary).
Housfy Rentals: a safe alternative
At Housfy, we are aware that it is a great concern for the owners, that is why we decided to start working with rentals and offer a safe option for our clients.
Housfy Rentals offers a comprehensive management service in which we include a policy for non-payment of rent, in this way you will have coverage in case of non-payment and you will be paid without exception on the 15th of each month. If you want to rent your property, do not hesitate to contact us
