Unpaid rent insurance

An owner who lets a home runs the risk that the tenant stops paying, and that the eviction procedure, long and regulated, deprives the owner of income for many months. Unpaid rent insurance protects against this. It pays unpaid rent and charges, generally until the property is recovered and up to a cap, covers litigation costs and often damage found when the tenant leaves. The insurer requires the tenant to meet solvency conditions at the outset, for example a rent-to-income ratio, and the landlord to follow a procedure for prompt reporting of arrears. The law in principle bars a landlord who has such insurance from also demanding a personal guarantor, except for students and apprentices, to avoid the tenant being screened twice. Alongside private insurance, a public scheme, Visale, run by a social housing body, offers a free guarantee to young people and some employees, standing in for the family guarantor they lack. For the market, the product is sensitive to the economic cycle and the length of eviction proceedings, and it has a social effect: the insurer's solvency criteria effectively become the criteria for access to housing.