As a landlord, you have invested a significant amount of money into your business and rental properties. To protect your investment, you have property insurance to cover damage from environmental factors and liability issues. Your tenants also have tenant’s insurance to protect their belongings. However, what about protection against a tenant who does not pay rent? This is where rent guarantee insurance comes in. Despite being a relatively new concept in the United States, this type of insurance is gaining popularity among landlords due to its affordability and protection benefits.

One of the main concerns landlords have when considering rent guarantee insurance is the cost. The cost for coverage will vary depending on your location and the available offerings in your area. However, the expense is reasonable when factoring in the protection it provides. You could balance the cost by adding it to the base monthly rent or even negotiate with a property management company that offers this option through a third-party service.

Rent guarantee insurance is designed to protect a landlord’s income in the event that a tenant defaults on rental payments. Unlike other insurance policies that might include “rental cover,” this type of policy specifically covers missed rental payments. Typically, a claim can be filed as soon as the tenant falls behind on rent or refuses to pay after receiving an official notice. However, most policies do not cover the first month of unpaid rent but can cover up to six months starting from the second month. It is important to remember that every insurance policy is different and has varying terms.

As a landlord, your worst nightmare is having a tenant who does not pay rent. Rent guarantee insurance helps to ease this concern by providing protection against income loss due to missed rental payments. This type of insurance is affordable and can be factored into monthly rent calculations. If you’re looking to secure your investment further, rent guarantee insurance is a definite consideration.