Rent payment protection insurance: what it really covers

Putting a property up for rent is a decision that generates recurring income, but it also involves a risk that worries most owners: the tenant’s failure to pay the rent. That is why more and more people are looking for information about exactly what rent payment protection insurance is, what it covers and what it does not before signing a tenancy agreement.

What rent payment protection insurance is

Rent payment protection insurance is a product (or, in the case of some agencies, a proprietary guarantee) that protects the owner against the risk of the tenant stopping paying the monthly rent. In general terms, these types of cover usually include payment of the unpaid monthly instalments for a given period, and in some cases they also cover costs arising from a possible eviction process.

However, not all policies are the same. There are important differences between them in aspects such as when the non-payment starts to be covered, the maximum amount payable, the utilities included, or whether damage to the property or locksmith costs are covered in the event that the property has to be recovered.

What a good rent payment protection policy should cover

When assessing a rent payment guarantee, it is worth looking at several key points:

- **When the cover starts.** Some policies require a waiting period before they begin to pay out; others, like UBICASA’s guarantee, cover non-payment from the first day of the contract until its end.

- **Utilities.** It is important that the cover also includes unpaid basic utilities (water, electricity, gas) by the tenant, and not just the rent.

- **Locksmith work and recovery of the property.** In the event that the property has to be recovered, locksmith costs should be covered.

- **Damage to the property.** A good guarantee should also include financial cover for repairing any damage caused by the tenant.

- **Cost for the owner.** It is worth checking whether the guarantee has any additional cost for the owner or is included in the rental management service.

UBICASA’s non-payment guarantee

At UBICASA we have designed a non-payment guarantee intended to give the owner genuine peace of mind. It covers rent non-payment from the first day of the contract until the end of it, includes the property’s utilities, locksmith costs if it is necessary to recover the property, and any damage the property may suffer, with a limit of 3.500 €. All of this at no cost whatsoever to the owner, integrated within our rental management service.

This guarantee forms part of the full process we follow with each owner: from the rigorous selection of the tenant to the signing of the contract and support throughout the entire term of the tenancy. The aim is to ensure that renting out a property ceases to be a source of uncertainty and becomes a securely managed investment.

How to choose between the different market options

Before deciding on one option or another, we recommend calmly comparing the conditions of each guarantee or policy: waiting periods, maximum amounts, exclusions and cost. Not all options offer the same protection, and a superficial reading can lead you to think you are covered in situations that are in fact excluded from the policy.

If you want to know how much you could get for your property before renting it out, we recommend reading our article on how to calculate the return on a flat for rent in Madrid. And if you still have doubts about which type of contract best suits your situation, you can consult our guide on long-term or seasonal lets.

Conclusion

Having a solid non-payment guarantee is one of the most important aspects of renting out a property with peace of mind. At UBICASA we support owners throughout the entire process, with a guarantee that covers non-payment, utilities, locksmith work and damage up to 3.500 €, with no additional cost. If you would like to know more details about how our rental management service works, contact our team and we will answer all your questions.