idealista's rent revolution with first tenant rent guarantee insurance

Amid a rental market still hampered by limited supply and soaring prices, idealista is launching an innovative rental insurance policy available to tenants. The policy covers up to 12 months’ unpaid rent should a tenant be unable to pay, as well as water, electricity and gas bills up to a specified limit. It also includes legal costs arising from eviction proceedings or claims for outstanding amounts.

In a first for the insurance market, the Tenant Guarantee programme, backed by Aserta, offers a range of additional cover options for tenants – creating a balanced product that protects both landlord and tenant. These extra, no-cost benefits include compensation in the event of unemployment, sick leave, hospitalisation due to an accident or accidental death. The aim is to give tenants peace of mind should personal circumstances threaten their ability to pay rent, in a market defined by scarcity and rising costs.

Consequently, the insurance – taken out by the tenant – offers protection for both parties to the agreement: the landlord is safeguarded against potential non-payment of rent, utility bills and legal or out-of-court defence costs, while the tenant is protected in the event of unemployment, sick leave or hospitalisation.

Another key strength of this innovative product from idealista/seguros is that it covers the entire duration of the lease: up to five years for individuals and seven years for corporate tenants. The premium is paid by the tenant, meaning the landlord enjoys full protection without bearing the cost.
 

How the new Tenant Guarantee works

  This new product works as follows:

• New protected payment cover – unemployment, sick leave, hospitalisation due to accident and accidental death – at no extra cost to the tenant.
• New contracting process from idealista/seguros, allowing prospective tenants to pre-qualify and receive an insurer’s certificate in real time, which can then be sent by email or WhatsApp to an estate agent or landlord.
• The certificate will inform the estate agent or landlord of the maximum monthly rent the insurer is willing to cover for the pre-qualified tenant. Valid for 30 days, it applies to any standard rental property with a rent equal to or below the approved amount.
• The estate agent or landlord can accept the tenant via a QR code, instantly notifying them of the property’s approval.
• This process provides the agency or landlord with a lead from a potentially solvent tenant, backed by a certificate guaranteeing that the insurer will cover up to 12 months’ unpaid rent in the event of non-payment.

Differences between a default insurance contracted by the owner and by the tenant

Paying the premium: If the landlord takes out rent default insurance, they are responsible for paying the premium and deciding whether to renew the policy. If the tenant takes it out, they are responsible for paying the premium themselves.

Non-payment: In the event of partial or full non-payment of the premium by the landlord, the insurer reserves the right to cancel the policy and may cease to provide cover. However, if the tenant fails to pay the premium – whether in part or in full – the insurer cannot cancel the policy and remains obliged to compensate the landlord.

Premium frequency: Rental insurance premiums are usually paid annually, with options to pay semi-annually or quarterly. In contrast, Tenant Guarantee premiums are paid monthly and automatically charged to a credit card.

Insurance renewal: The policy taken out by the landlord is automatically renewed each year, with the landlord free to decide whether to continue it. In contrast, the Tenant Guarantee is automatically renewed for the full term – up to five years for individuals and seven years for legal entities. The tenant cannot opt to renew annually but is obliged to pay for the entire duration of the lease.