Have to deal with financial difficulties when you are a landlord can jeopardize the collection of your rent. Fortunately, there is to help you during this period insurance for any unpaid rent. But how does this insurance work and What is the type of profitability of this insurance? Here is an article that will help you know the price of unpaid rent insurance.
How does unpaid rent insurance work?
Unpaid rent insurance is also called the unpaid rent guarantee (GLI)she allows protect the landlord in the event of unpaid rent from the tenant. This unpaid rent guarantee not only covers the landlord in the event of unpaid rent, but also in case of damage to the property, and it covers legal costs. It happens that even with a large deposit, the tenant is not able to pay the rent every month.
To find unpaid rent insurance at the best price, you must obtain offers from the various insurance companies. You can contact your usual insurance or contact a insurance specializing in unpaid rent guarantee. Making quotes allows you to choose the insurance that suits you and you like best.
The two types of contracts
This unpaid rent insurance makes it possible to cover the owner according to the terms of the contract that binds them respectively. There are two types of contracts:
- Individual contract: In this case, the owner is independent in his steps before and after the problem of unpaid rent. The follow-up must be very strict and very precise in order to provide the documents to the insurance company in charge of the case. All steps must be completed, and you as the landlord must strictly follow the laws vis-à-vis the tenant.
- Agreement: It is the purpose of the insurance responsible for the contract to take care of all phases of the latter. The owner will be informed of the steps but will not have to manage them, the terms of this contract will be written in the latter.
The price and profitability of renters insurance
Unpaid rent insurance is one optional contract that the owner can use. The owner is free to take out this insurance, but he wants to pay for the service provided. The price of this insurance will mainly depends on the rental price. In fact, the remuneration to the insurance companies of this type of contract is between 2.5% and 5% of the annual rent of the property, with taxes included. The owner can choose to pay the amount as monthly payments or as an annual premium.
The owner finds the profitability of this type of contract in the efficiency and quality of the service provided. In fact, this type of insurance allows the owner to have peace of mind possible genes which a rental can cause. Group unpaid rent insurance makes it possible to deal with no rental issueswhile individual insurance allows you to receive the rent, but to have to manage the recovery of this rent yourself and the steps that allow you to recover it.