If you are a landlord, chances are, making a return on your investment is your greatest goal. But, what happens when your tenant does not fulfill their duties and defaults on their rent? We are willing to bet that this is one of your greatest fears. Thankfully, rent guarantee insurance (or rent default insurance) is a way to protect landlords in the case of an unpleasant situation like this.
What is rent guarantee insurance?
Typically, landlords have insurance policies that protect them against things like buildings and contents, emergency assistance, liability cover, and legal cover. Some policies also include something called ‘rental cover’. However, ‘rental cover’ does not mean it will pay out if a landlords tenant falls into arrears. It is also likely that the landlord will only be reimbursed for lost rent during the periods when a property is uninhabitable because of another insured event such as a hurricane or fire. This leaves a whole other common type of scenario uninsured and ultimately landlords, unprotected from tenants who cannot or refuse to pay rent.
 |
Luckily, the idea of rent guarantee insurance was created internationally and has caught on in the United States. Very simply put, rent guarantee insurance is equivalent to rent default insurance - it protects landlords against loss if the tenant should stop paying. The insurance company will pay landlords the amount of rent they are owed under their lease after they have filed a claim. This insurance type was created because when tenants default on their rent, it can take months for landlords to regain their property and seek out another tenant all while continuing to pay a mortgage on a home not returning any profit. This could ultimately result in landlords missing mortgages turning their rental investment upside down.
How does rent guarantee insurance work?
Is rent guarantee insurance really necessary or should I just risk it?
 |
|
|
Some landlords may be thinking “I don’t have a need for rent guarantee insurance because I perform strict screenings and credit checks on all my tenants before handing the keys over”. Unfortunately, with the constant fluctuation and uncertainty of the economic times, even the best tenants can find their circumstances changing, resulting in a situation where they are unable to meet their rental commitments, thus putting landlords rental income at risk. Most commonly, tenants default on their rent for the following reasons:
- The tenant loses their job or has a change in financial stability
- The tenant decided to move-in with their loved ones
- The tenant got divorced
- The tenant got a job offer 100 miles away from the current home
- The tenant just disappeared and abandoned the unit without giving notice
Whether the case may be, every year millions of tenants default on their rent leaving landlords in a costly nightmare. According to
Vice President of Product Solutions for CoreLogic,
there is an estimated 40 million rental units throughout America. With approximately 2.2 million landlord-tenant court cases filed every year means 5.5% of all rental units in the U.S. go through a landlord-tenant court action annually. When you look at the numbers this way it's hard not to argue that the small cost of rent guarantee insurance is always worth it.
How to purchase rent guarantee insurance?
Sometimes when it comes to picking which rent guarantee insurance is right for you, it’s hard to know what is best. Steady Marketplace provides online access to landlord rent guarantee insurance, providing landlords comprehensive risk management solutions via an online platform. Steady offers surplus lines insurance products through its affiliate Steady Insurance Agency, LLC or its licensed designated insurance producers.
Why Steady is the best option
Steady’s insurance coverage is offered on a surplus line basis, which means that if the carrier became insolvent, you will not be eligible for coverage under the state’s Guaranty Fund, which is why we only offer coverage through insurance companies affiliated with one of the largest insurers in the country.
Steady Marketplace helps landlords gain a peace of mind with the rental income protection they deserve. Loss of rental income from investment properties can put landlords at risk of falling behind on mortgage or tax payments, quickly transforming a monthly income-producing asset into a monthly liability. With Steady, landlords can rest easy knowing their rental income is covered.
Not only is Steady’s protection simple and reliable, it is also very affordable.
Steady utilizes technology and data to provide the most accurate and affordable prices specifically for a landlords unit(s). Some other benefits landlords receive when using our insurance policies include:
- The ability to Insure any residential property
-
A choice to select customizable coverage options on an excess and surplus basis where no admitted insurance product is available for up to 6 months of lost rent per year
-
A guaranteed quick return on non-payment once a claim has been filed
Steady’s partner referral program
 |
|
|
Are you a property manager or insurance producer? If so, do your landlord clients a favor and introduce them to protection against rent payment defaults to ensure better rental outcomes. Both our Partner Referral Programs offer a wide selection of marketing materials, co-branded opportunities, and a variety of technology integrations to provide your customers with easy access to solutions and enhance their overall satisfaction.
Property management marketing program
The Property Management Marketing Program allows property managers to:
- Help customers keep their rental income steady
- Gain access to advertise leading rent guarantee insurance
- Create a new marketing income stream (marketing fees are not conditioned on the purchased or sale of insurance)
Insurance producer referral program
- Introduce landlord clients to a complementary coverage
- Use a complete marketing tool-kit to engage more customers
-
Generate referral income with little to no effort.
Partnering with Steady is truly a win-win for both you and your clients. Learn more about the partner program.
Landlords have enough stress and responsibilities on their plate, and we are dedicated to helping them avoid some of it with rent guarantee insurance. It’s time to stop waiting weeks on end to get paid by unreliable tenants and diminish any worries you have on tenants defaulting on their rent and start protecting your rental income with Steady Marketplace today.