Many property owners still do not have a
rental insurance to protect them against the risks that exist when renting their property to a third party. It is essential to have rental insurance that provides peace of mind and can also verify that the tenant is reliable. That’s why we will explain the
reasons why you should take out insurance for your rental property.
At
AB Apartment Barcelona, we provide guidance in selecting the best insurance that suits your needs.
What is rental insurance?
Rental insurance is a policy designed so that property owners can rent their homes with complete peace of mind. With this, the owner ensures the
legal defense of the property. This means that the hired insurance company will cover possible cases of tenant non-payment, offering compensation to the landlord. In addition, most rental insurances generally offer additional coverage for legal advice in case of rental issues, vandalism damage, theft, and even protection of property and furniture.
Is rental insurance mandatory?
Rental property insurance is not a mandatory procedure, but it is highly recommended, as it will save you from unexpected expenses, such as non-payment by tenants. Generally, rental insurance is the responsibility of the owner, as the property belongs to them and by law, they must protect it.
However, although the tenant is not required to take out insurance, it is recommended that they do so to protect the contents of the property. Even though they are not the owner, there are certain expenses they are responsible for just by occupying the property, such as covering damages to the property with the deposit money or paying for furniture or appliance repairs out of their own pocket. All this will depend on what is agreed between both parties in the
rental contract.
Benefits of Insurance for Property Owners
The main guarantee offered by insurance for property owners is that it covers rental non-payment. That’s why it is best for landlords to
take out non-payment rental insurance.
What is non-payment rental insurance?
It is a Legal Defense insurance that protects the owner against any issues that may arise with the rental of their apartment, from non-payment to disagreements between the parties about who should pay for a repair.
Although this procedure is not mandatory, it is highly recommended. Here are all the
benefits of taking out Non-Payment Rental Insurance:
1. Guarantees Payments
Undoubtedly, this is the greatest protection that this insurance can provide you. If you decide to rent out your property, you will need the tenant to make all payments, either to cover some expenses or simply to have some extra money. Therefore,
the insurance company you hire will take care of pending monthly payments, as well as other expenses if necessary. This way, you can rest easy until the situation is resolved.
Furthermore, if the rental contract states that the
utility expenses (water, electricity, gas) are the responsibility of the tenant, and they do not pay them, the non-payment insurance also covers these.
2. Security
Another advantage of having non-payment insurance is that you are covered in case of
damage or vandalism to the property. Your insurer will guide you through the entire process.
3. Convenience
A property is a significant investment, and renting it out involves great risk. That is why having non-payment insurance gives you peace of mind, so you don’t have to worry.
4. Legal Protection
If you have serious issues with tenants, such as
breach of the rental contract, there are certain non-payment insurances that provide you with
legal protection to file a lawsuit against the tenant, thus keeping your rights protected.
Documentation Required to Take Out Non-Payment Insurance
As a property owner, if you are interested in taking out non-payment insurance, you must consider the necessary documentation for this. Depending on your employment status, the following documents are required:
Employed Individuals
- The last 2 payslips
- Employment contract
- ID
- Tenant data authorization document (Data Protection Law)
Self-Employed Individuals
- Latest income tax return
- The last two self-employed payments to Social Security
- ID
- Tenant data authorization document (Data Protection Law)
Pensioners
- Pension certificate issued by Social Security
- ID
- Tenant data authorization document (Data Protection Law)
As you can see, if you are looking for insurance to rent your property with complete peace of mind, this is the best option. It will provide you with extra coverage in case of non-payment, frequent risks, and professional help to resolve any conflicts.
