Some people mistakenly believe that insurance is a waste of money. This is by no means the case, as more and more homeowners in Spain are becoming convinced. Especially those of them who use their own housing to earn money on renting can tell about the benefits of insurance.
It's no secret that in recent years, delinquencies on real estate loans have reached record levels. In fact, experts in the real estate sector said that in 2020 alone, non-payment of rent increased by 66% year-on-year and became one of the main reasons for eviction.
Today, the situation is only getting worse, which is being pushed by the global crisis, inflation, falling incomes, high energy prices and much more. Against the background of all this, homeowners have found a special need for insurance. Insurance in case of such non-payments.
Of course, it is always possible to evict the defaulter, but this itself will not return the invested money and will not give any profit. The insurance policy for such cases allows landlords to rent housing without high risks and cope with various types of unforeseen circumstances.
What is the tenant's insurance??
Insurance for a landlord is a protection plan that should never be neglected. And this type of insurance policy has already become extremely popular among Spanish homeowners, because for an affordable and economical monthly fee they can prevent numerous headaches associated with the main main source of income.
Non-payment insurance is specially designed to protect the interests of the landlord if the tenant does not fulfill his monthly payment obligations. This insurance service is offered by a wide range of organizations on the market, and leading players offer custom conditions created for a specific client. Most often it includes:
- Deductible coverage — the part of the damage that the insurer usually does not pay;
- Expenses for locksmith services and replacement of locks;
- Coverage of damage from vandalism cases;
- Covering the real estate agent's fee for re-occupancy.
In addition, it should be noted that for greater comfort and convenience, landlords can choose from a wide range of offers. We are talking, among other things, about bonuses for 6 and 12 outstanding lease payments, as well as covering legal costs, for example, in the process of eviction.
Advantages of insurance against non-payment of rent
According to recent studies, the average amount of rent arrears among tenants in Spain is 3,179 euros. And this is always a big headache for landlords when the tenant stops paying what is due.
Below are the three main reasons why Spanish homeowners are increasingly entering into insurance contracts for the cases described:
- This reduces the stress level for the landlord if the tenant is going through hard times and does not make timely monthly payments.
- This type of insurance also protects the landlord's pocket, covering cases of vandalism or other causes of damage to physical property.
- When the lease ends abruptly, insurance gives the landlord more time to find a new tenant and less worries during this process.
As may be obvious, this form of insurance provides homeowners with many advantages.