WHAT ARE THE DISADVANTAGES OF UNPAID RENT INSURANCE?

 In the rental sector, the tenant's situation can sometimes deteriorate. He cannot pay the monthly payment agreed in the lease contract. This is why the lessor prefers to take out unpaid rent insurance. This has many advantages such as continuity of rental, repair of the property in question if necessary, etc. But, these advantages have limits which we will discover in this article.

The existence of dishonest insurance establishments?

It is very important to keep in mind that only registered insurance companies can cover non-payment of rent, as they are solvent. In France, this type of company also hides in a legal and well-registered status, only, the way in which they distribute money to its customers is a bit too much. You should be wary of this and only choose companies with a very good reputation. The reality is that when they have to fulfill their part of the contract, such as paying unpaid rent, they are playing with the contract to avoid their responsibility. This means that you must read the contract carefully before signing to avoid this.

Late payment

In the event of a problem of lack of payment on the part of the customer, the lessor can make a request to his insurance. However, you must also prepare justification files, and wait some time for payment. However, to receive this rent, it is not enough to wait and prepare the files, the situation must also be in your favor to receive it. For example, you must choose your tenants carefully according to their status and their history in the rental sector.

What to do if rent is not paid?

The problem arises when a landlord who has taken out unpaid rent insurance is unable to pay. This is happening because these types of companies like the one caused by Covid-19, they are cash strapped and cannot pay the owners. You may be wondering, and how can this happen? The answer is that these companies, in most cases, are paid directly by the tenant and, logically, if the tenant does not pay, they receive no income and cannot pay.

Be wary of insurance companies that guarantee your rent

The unstoppable boom experienced by the rental market in France in recent years has led to the proliferation of multiple products which claim to promise to guarantee rents to landlords in the event that the tenant stops paying their rent. The development and emergence of these insurances on the market has given confidence to many owners, favoring the development of the market, but among those who market or “sell” them, not all are authorized to do so.

Therefore, before taking out one of these insurance policies or one of these products, it is necessary to take certain precautions to avoid surprises. The marketing of insurance with a bad reputation for non-payment of rent has experienced spectacular growth in recent years, with the resulting harm to consumers. Unpaid rent insurance has been around for a long time, but in recent years it has developed a lot and improved. The problem is that it has awakened the imagination of those looking for a source of income through new services which, like insurance, must be regulated by law.