Financial crises permeate through many social groups in different ways. Homeowners and landlors renting out a property may be extremely affected by tenants who are unable or unwilling to pay the monthly rent. If you are a landlord or homeowner in Spain who is already renting out or planning to rent out a house, a holiday home, an apartment or flat you might be interested in taking out an insurance against non-payment of rent also called rent protection insurance to protect this source of income.
This insurance works independently of any other home insurances that you might have to protect you from natural disasters, robbery, etc.
A Rent Protection Insurance Covers an Eventual Loss of Income
Why Taking Out a Rent Protection Insurance
Non-payment of rent is a breach of the contract between the landlord and the tenant. It is a legal matter and the Spanish justice system must take care of it. However it may take a good while before things are solved by the courts. A rent protection insurance gets you covered against this eventuality. Thus this kind of insurance is a simple yet effective way of minimizing the risks associated with property rentals.
Basic and Optional Covers in a Rent Protection Insurance
The following are some of the basic covers usually offered in rent protection insurances.
- Non-payment of rent: the insurance pays the subscriber the amount owed by the tenant
- Legal defense: the insurance subscriber is entitled to the legal defense in the court procedures regarding the eviction of the defaulting tenant. This includes extrajudicial advice, damages claim procedures and criminal defense among other services.
- Home assistance: 24/7 professional assistance in case of home sinisters including also emergency assistance.
Optional covers usually include:
- Property damage: covering both damages to the property and to the contents caused by acts of vandalism by the tenant
To Take into Account in a Rent Protection Insurance
Many rent protection insurances have strict policy clauses limiting the access of landlords. These may differ greatly between companies. Some of the clauses that may prevent you to take out such an insurance are:
- not allowing students as tenants
- not allowing shared housing
- not allowing properties older than a given year
- limiting the insurance to properties over a certain number of square meters
- limiting the insurance to properties rented out for a year or more
These are some of clauses need to be taken into account before subscribing an insurance on your rental property.
Contact us at Cogesa Expats, a renowned Spanish insurance broker, and we will take a look at your specific situation and provide you with the right rent protection insurance that meet your needs. You can send us an email, give us a call or fill the form below and we will contact you as soon as possible.
