Finding rental homes is complicated, especially in cities like BC & Alberta, but things can get even more complicated when rental insurance comes into play. The insurer is the one that has the last word on which tenants are going to enter the house and for this, they demand certain requirements. In today’s article, we will see what home rental insurance looks at to admit a tenant.
5 Points What Home Rental Insurance Looks At
The insurer wants to take minimal risks when accepting a tenant to rent a home. The requirements are not as demanding as if you choose to take out a mortgage, but there are minimum conditions that the tenant has to meet in order to be granted the rent:
In order to carry out the feasibility study, the insurer will ask the tenant for certain documentation, it is likely that it will vary according to the company, but in general terms, it will be:
If you have an employment contract: you will have to deliver the last 2 payrolls and, in the event that the worker’s seniority is less than 6 months, you will have to present the working life.
Self-employed: As there is no contract, the self-employed will have to submit the latest income tax return and the latest quarterly returns.
Pensioners: Social Security Certificate proving that they are pensioners.
List of defaulters
Once they have a copy of the tenant’s identity card and employment data, they will check the list of defaulters as financial institutions to ensure that they do not have any outstanding debts or debts. In case you have a serious non-payment, your application may be rejected, so keep that in mind if you are interested in renting with home rental insurance.
When we talk about savings, it is the same amount as if you rented without insurance. Before renting, apart from being able to pay the monthly rent, you will have to have savings to pay the deposit and the real estate rental commission.
The deposit is one month’s rent, which the owner will have to deliver to the corresponding agency of the city and, in addition, may request two more months as an additional guarantee.
The Commission: The real estate companies can ask for up to 10% of the monthly rent from the tenant and another commission from the owner for the rental management. The amount is not regulated, so it will vary depending on the real estate.
The insurer will also review the employment contract to verify the tenant’s seniority and job stability. As we have seen, depending on the employment situation, the company will ask you for some documents or others.
The insurer has a general requirement that the annual income cannot be more than 45% of the annual salary.
With these five points, you already know what rental insurance looks at when studying the tenant’s viability. Next, we will see what the policy will cover.
What Does Rental Insurance Cover?
Home rental insurance coverage will depend on the type of policy you take out; there are some that offer more services than others. However, here is what insurance can cover:
Non-payment of income: In case the tenant stops paying the rent, the insurance would cover up to 12 months.
Legal and judicial coverage: If there were any legal or judicial proceedings to be done, the insurance company would cover it and take care of it.
Furniture and appliances: The insurance will cover the damage caused to the furniture or appliances included in the inventory.
Damage to the home: Any destruction or damage that the tenant has caused in the house will be covered by the insurance. Normally, there is a maximum amount that can be covered and it would be given to you when the tenant leaves the property.
• Lock change.
• Comprehensive coverage.
• DIY service.
If you are interested in renting a home, you can count on our team at Yarmoloy Group. Our experts will help you get the best tenants and with the subsequent management of the rental. Contact us without obligation.