Has anyone heard of rent payment default insurance?

Question

I have heard of this type of default insurance in the past and I considered using it t one point. Just wanted to know, would anyone sign up for rent payment default insurance. I know it is pretty big in the UK but just curious what are peoples thoughts on this type of insurance?

Sky Mikesell · Answer

Hello @Art Veal @Chris T.

In full disclosure I am part of NationwideRentsure.com    You are Correct Art.. Default insurance has been in UK, Australia, Czech Republic, Germany and numerous other places for over 25 years.  We have been in the North America for 2 years now.  Each default protection program protects the landlord differently.. Most will continue to pay the landlord rent, some will pay for the cost of the eviction, some will even pay for malicious damage caused by the tenant.

Andrew Postell · Answer

@Art Veal the best protection against rent defaults is properly screening your renters.  It's not foolproof but neither is insurance.  You'll have premiums to pay and a deductible as well.  Your standard insurance policy will have a "loss of rent" option, meaning that if the home floods or if it catches fire then your loss of rent if covered by your policy; usually for 6 months.  I am sure default insurance will weigh heavily on your cash flow but I think it would be important to get a figure on it so you can make an informed decision if it's worth it.

Federico Gutierrez · Answer

It's a thing in Australia but a total scam IMO. My parents had a tenant that didn't pay, created damages and had to evict, the insurance company made them jump thru hoops to try claim in the end to only deny them. After that occurred, I changed all my insurance policies in Australia to only cover for damages in terms of flood and natural disasters

Chris T. · Answer

@Art Veal

Are you referring to something similar like this? rent insurance for landlords? Aon used to have something similar but I think they discontinue it.

http://www.libertyrent.com/

Or rent insurance for renters?

Personally, I think insurance is a necessary evil. It should be used to insure big $ items such as liability or property where judgments could easily go over 6 figures.

Madeline Walsh · Answer

I think it is back up after COVID. There are several different options, including avail (steadily) and rent rescue. I am wondering if they are worth it and if anyone else has tried them.

Aaron DiCaprio · Answer

@Art Veal @Chris T. @Andrew Postell @Federico Gutierrez @Lindsay Stewart  Forgot to tag all of you on my post a few minutes ago.  It's relating to rent default insurance.

Aaron

Lindsay Stewart · Answer

Actually Frederico, it has become much easier and more common here in Australia now, but very expensive.  Would not necessarily recommend it still.

Art, I find it much better to build in to my profits one month vacancy each year to allow for some of the down time we may experience changing/evicting tenants if worst comes to worst.

This often is a much cheaper and easier option than trying to find insurance for rental payments

Chris T. · Answer

@Sky Mikesell

Thanks. I could see potential uses for your product. Especially if I am uncertain about a renter but limited with options.

I read through the membership package + FAQ, what's the cost of a trip fee? and is there a deductible?

@Art Veal

No, I have not used any insurance products that protects again lost rent.

Art Veal · Answer

Yes, this is the only one I have found and it markets to the tenant, not the landlord. Is there a catch to these types of places? Do you know of any other? Have you used this one?

Has anyone heard of rent payment default insurance?

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