07 Oct New Rent Loss Insurance Now Available For Landlords
It is unfortunate, but the reality is that nearly every landlord has experienced a loss due to non-payment by a tenant. As seasoned and novice landlords alike know, if a tenant is unable to pay their rent for whatever reason, a landlord is forced to take legal action eventually resulting in the eviction of the tenant.
Through this process, and even upon the eviction, will the landlord be out the rent that is owed, and most likely, unable to generate any additional income from the property until the entire process is finalized. New Rent Loss Insurance Now Available For Landlords Add to that significant legal costs ($700 for an eviction in Los Angeles, where MW Real Estate Group manages), and sometimes vandalism left by tenants on the way out, and you start to realize why insurance against lost rents due to non-payment sounds like it could be a landlord’s dream come true.
Sure enough, a new player on the scene, Aon Rent Protect, has introduced a novel service to protect landlords, offering insurance solutions designed to cover landlords through eviction processes to eliminate the lost rent. The burden of losing money due to the non-payment of rent, Aon tells us, is now a thing of the past. Working with tenants in regards to the reason for non-payment (i.e., abandonment, eviction, death, hardship, military service), Aon’s coverage will apparently provide landlords with up to six month’s rent that would be lost. Thus, while in the past property and casualty insurance companies have offered landlords rental protection for physical damage as a result of natural disasters and such, but never solely for tenant default, Aon now offers a brand new solution to an age old problem. It’s surprising no one else thought of it. Well, not in the US. This service has in fact been a common practice overseas for several years. Over here Aon just recently introduced it into a handful of states, and has to date received an overwhelmingly positive response.
Whereas in addition to being available in California, this landlord protection is also available in Colorado, Arizona, Arkansas, Idaho, Michigan, Ohio, Pennsylvania, Rhode Island, Tennessee, Washington D.C. and Wisconsin. Soon coverage will be available within all of the 50 states.
Aon’s protection services are beneficial to both individual rental property owners as well as investment firms; landlords can receive up to six months of rental income assistance. Premiums start at $250 per rental unit, and annual costs are dependent upon the cost of the rental property.
The new protection service also allows property investment firms to limit its total liability, ensuring rent default losses are mitigated and hedged (this program is currently available across the United States). Having said all this, as with any other insurance purchase, every buyer must read the fine print to decipher whether or not something like this would work for their particular situation or property type. Aon, like any other carrier, is not in the business of losing money. It requires certain minimum operational rent stabilization criteria in place that would make this a non starter for many a B – or C property.
All information can be viewed on http://www.aonrentprotect.com/sites/Rent/Pages/Home.aspx.