The moment a person is renting a property, it is imperative to exercise caution in certain procedures. The main thing is that the owner has all the guarantees that the contract signed will give him in case of default.

It is very common to appoint a guarantor, but this is not always possible, and in this case, surety insurance is a good alternative. The surety bond is a guarantee of the payment of rent that exempts the figure of the guarantor. So that you can get to know him better, we prepared this post. Here you will know what it is for and how to use it. Check it now!

What is secured bond?

What is secured bond?

This type of insurance is an alternative form often used by rented property owners to protect themselves against any damage that may happen to their tenants. In addition to providing security for those who hire you, the requirement of surety insurance makes the landlord need not have concern in getting a guarantor.

Thus, the landlord does not have the need to have a large amount of money available when renting a property, such as the payment of 3 months in advance, known as surety bond. That way, for those who plan to rent a property, these requirements are to pass more security to the owner, if any tenant does not have the financial availability to pay the rental months.

Getting a guarantor is often difficult, especially since no one wants to run the risk of having to pay off third party debts. Because of this, the surety bond was created in order to facilitate this type of business, ensuring that the owner will not have any loss.

What are the differences between surety bond, guarantor and rent guarantee?

What are the differences between surety bond, guarantor and rent guarantee?

The guarantor is a person who participates in the rental agreement, but is neither the owner nor the tenant.

He is responsible for fulfilling that person’s obligations if he does not fulfill his duty to pay the contract’s bills.

In order for the owner of the property not to lose, the guarantor assumes the costs arising from the rental relationship, such as delays, fines, renovations, among others. These amounts can be charged directly to him if the debts are not paid by the tenant.

Generally, this figure needs to have a property of similar value or higher than rented. This requirement is a way of securing the lessor if there is any case of contract fraud. Their proof of income is also necessary, making the whole process very bureaucratic.

With respect to rental guarantee, it is an option that offers protection to the lessor against possible fraud. It is also known as collateral and is a deposit amount deposited by the tenant in favor of the owner by the time of the contract. The costs of rent insurance may vary, but can not exceed 3 months of monthly expenses of the property.

It is a good option for those people who wish to make a rental and have the money available for it. In the event that the tenant fails to comply with their contractual obligations and becomes defaulted, the landlord may withdraw this money as collateral to cover their expenses.

In contrast, if there is no incident during the validity of the contract, the lessee receives the amount initially given as protection. Typically, these values ​​are applied to the basic interest income. However, these rates do not accompany even the value of inflation. With regard to surety insurance, which is the most advantageous option in these relationships, it represents a correct value for insurance companies, as well as any other type of insurance policy.

Thus, if there is a non-payment of rent, this insurance is responsible for healing the debt directly between the tenant and insurer. This option is quite feasible for people who do not have guarantors and is out of cash to give as a guarantee of rent.

What are the benefits of surety insurance?

What are the benefits of surety insurance?

There are several benefits that surety insurance offers for people. Check out now the major ones that will bring comfort and practicality to you.

1. Avoid constraints

One of the best benefits of this type of guarantee is independence. With it you do not need that willingness of someone to rent a property, quite different from what happens in the traditional way of offering bail.

With the surety bond, the only ones involved in the process will be the interested ones, which in the case, would be the lessor, the insurance broker, the insurer and you. To hire this type of insurance, the insurer needs to analyze the applicants’ records for the lease.

The prospective tenants will receive from the insurance brokerage records and fill in all the precise data. The Broker specialized in this type of insurance will provide all advice to regulate and simplify the process in order to make it quiet for lessor and lessee.

2. Provides assistance

The advantages of insurance are not restricted to the lessor. The tenant will have at your disposal a package of services to support the property that you wish to rent. Assistance is provided for emergency repairs.

The aid has service of hydraulic repairs, electrical repairs, among others that are common to happen in any dwelling. To request services, you only need to contact the insurer stating the problem.

3. Provides ease of payment

In addition to being the end of the embarrassment of seeking a guarantor, this type of insurance is the opportunity to provide a guarantee without being de-capitalized with the disbursement of large sums to pay the premium, which is the price to be taken out by insurance.

Although it varies according to the risk of the renter’s registration analysis, the insurance price is usually between one and two times the amount of a rent.

This price corresponds to the contraction of all the guarantees that the insurer assigns to this insurance. In addition, some variation may occur more or less, depending on the coverage that is contracted. There are companies that specialize in the market and can help you better understand the functioning of the surety bond.