Home rental insurance, who pays for it?

What happens if there is a leak in the rented house? Can the tenant take out insurance to cover the return of the deposit? Does the landlord have to take out insurance for non-payment of rents? The rental home insurance raises many questions for both the tenant and the landlord. In this article we answer the main questions regarding this type of insurance.

Types of rental home insurance

When renting a home there are various aspects that can be covered with rental home insurance, therefore, we can say that there are several types of rental home insurance or types of coverage, which are the following:

Container insurance

The first thing we should know is that the home insurance in rental it is not mandatory, but it is recommended to keep the property in the best conditions and be protected in the event that something happens such as a pipe break, for example. In the event that the house is empty (it does not have furniture) a continent insurance is usually contracted by the owner. Continental insurance usually covers the construction (foundations, walls, roof, installations, pipes, etc.) and usually has certain limits that will influence the price of the insurance.

Content insurance

The content refers to what is inside the house such as furniture, appliances, jewelry, computers, televisions, mobile phones and valuables, among others. In this case, the policies also usually have limits that affect the price to pay. It may happen that in the house part of the content is owned by the landlord and another part owned by the tenant, so each one can contract a different insurance.

Third party liability insurance

If a pipe breaks in the rented flat and a leak occurs downstairs, for example, with third-party liability coverage, the insurance company will take care of those damages. But two situations must be distinguished: – That the damage has been caused by a defect in the plumbing of the house. In this case, it will be the responsibility of the owner of the apartment and his insurance must cover it. – That the damage is caused by an act attributable to the tenant (for example, a tap has been left open). In this case, civil liability corresponds to the tenant and must be covered by his own insurance. Sometimes, the landlord is the one who pays for an insurance that covers the container, the content that corresponds to it and the civil liability that affects it, but the cost can be passed on to the tenant or that the tenant contracts other insurance or any of them (especially the of content if the furniture and electrical appliances are owned by the tenant and that of civil liability for damages derived from the actions of the tenant). However, insurance companies adapt to each case and there may be insurance that covers the container and some furniture that belongs to the lessor and its civil liability and another insurance that covers the content that is the property of the tenant and the civil liability that derives from their actions.

Rental payment guarantee insurance

This insurance is specially designed for rental housing and, in general, covers non-payment of rent by the tenant, non-payment of home supplies (water, electricity and gas, among others), as well as the cost of the legal defense (refers to the fees of the lawyer and attorney involved in a possible judicial proceeding) in the event of a possible conflict with the tenant (for example, an eviction procedure for non-payment of rent). In this case, it is the owner who usually contracts the insurance, but he can pass the cost on to the tenant or ask him to pay it. However, to avoiding delinquent tenants steps can be taken before signing the lease such as Check the solvency of the potential tenant through their employment contract or payroll, among other aspects.

Deposit return guarantee insurance

For its part, the tenant can also take out insurance to cover a series of risks, for example, the refusal of the owner of the house to return the deposit when the rental contract ends. In this case, the policy covers the recovery of the deposit. The legal defense is also usually included in this insurance in the event of conflicts between the landlord and the tenant. This type of insurance is contracted directly by the tenant.

Rental home insurance: what is best to take out?

As we have seen in the previous sections, rental home insurance can have different coverages and what is contracted will depend on each case. We see it, in summary, below:

If the house has furniture from the landlord and the tenant.

– It is recommended that the owner of the house take out insurance that covers: ▪ The continent. ▪ The content (furniture or electrical appliances that are property of the lessor). ▪ Civil liability that can be attributed to the owner. ▪ Legal defense in case of conflict with the tenant. – For its part, the tenant is recommended to take out insurance that covers: ▪ The content (furniture, objects and household appliances owned by of the tenant). ▪ Civil liability attributable to the tenant. ▪ Legal defense in case of conflict with the landlord.

If the dwelling only has the tenant’s furniture:

– The landlord may contract insurance that covers the mainland, civil liability and legal defense. – The lessee may take out insurance that covers the content, civil liability and legal defense. Additionally, the landlord can take out insurance to cover non-payment of rent and similar items (community expenses or supplies that are passed on to the tenant) and the tenant can take out insurance that guarantees the return of the deposit at the end of the lease.

Aspects to consider before taking out home rental insurance

Whether you are a tenant or the owner of a rental home, you should consider a series of aspects before taking out rental home insurance: – Security measures that the home has (safe, armored or armored door, alarm, bars, 24-hour security, etc.). – Coverage offered by each company. – Limits of each coverage. – Real valuation of the container and the content. – Form of compensation in case of accident: replacement, replacement or compensation with an amount of money. – Comparison between policies of different companies to know the best option. It is important not only to value the price but also the customer service, the coverage, the limits of each coverage and read the policies carefully. Therefore, taking out insurance for a rental home is important to cover unforeseen events and, if you need it, you can count on the professionals at Proddigia to rent your home or advise you on the insurance that is most convenient to take out in order to have peace of mind.

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