Being a landlord means depending on other people for monthly income. When tenants default on their rent, it can have a drastic effect on your bottom line. Rent guarantee insurance can protect you when this happens. This coverage has three main benefits.
1. Protection Against Rental Loss
What is rent guarantee insurance? This policy can reimburse you if a tenant is unwilling or unable to pay rent. If, for example, a tenant is deployed, you can be reimbursed for up to three months of rent. This gives you time to find a new tenant without losing financial momentum.
Even if you screen your tenants for red flags, you may still have to evict someone. The experts at Rent Rescue recommend rent guarantee insurance to cover up to $1000 of the legal fees associated with going forward with an eviction.
At a monthly rate of $25 per unit, the premiums can seem pretty steep on the surface. However, you can simply fold this cost into your tenants’ rent payment, leaving you with virtually no out-of-pocket payment. As an added bonus, premiums are tax deductible.
No matter how careful you are, you may still occasionally have tenants who default on their rent. Rent guarantee insurance protects you when this happens.