I recently discovered an interesting new insurance product for the small owner Multi-family market that allows private landlords in the U.S. rent default insurance. It may be hard to understand the excitement behind this new offering, so let me paint a picture for you:
Three kids in college, the economy, a mid-life crisis car, digital cable (with HBO added on, of course), utilities, holidays, etc. The list is extensive! It’s going to be a tough year to go to the lake house. Gah, the lake house! There’s another expense to add to the list. Wait a minute… the lake house. We don’t need to go to the lake house, but someone else could! There has to be someone out there willing to rent my second home. Here I go, time to find a tenant…”
This thought process could be the catalyst to someone’s shift from owning a second home to owning a residential investment property. Great idea – renting out one’s investment property can yield rental income of potentially great value to the owner. So, say our protagonist from the beginning is named Jim. Jim finds someone he thinks will be a suitable tenant for his lake house property. Sure, this guy looks a bit sketchy, wears a dirty white undershirt covered in Doritos, and doesn’t seem to bath often, but Jim needs the money and the lake house has been more of a fund-guzzler than a leisurely retreat for his family. This tenant will do.
Things are going well with Jim and his rental property, until after a few months, Jim’s tenant stops paying rent. As the residential landlord, Jim is now losing his much-appreciated monthly income. There’s no money coming in and money still going out for ongoing property expenses. Essentially, this is turning into a severe financial problem for Jim. What is Jim going to do? Putting aside the more illegal, painful, and/or mob-affiliated options, Jim turns to Aon Affinity and their rent default insurance.
Through a group effort with ARS and GRIP Solutions Advisory carrier partner QBE Insurance Group, Aon Affinity has created Aon Rent Protect insurance so that landlords, like Jim, don’t have to worry about financial terrors resulting from deadbeat tenants. Rent Protect was designed to reimburse up to six months of lost rent which puts Rent Protect in a league of its own in the U.S. when it comes to protecting individual landlords against rent default.
And hey, don’t feel bad about the premium subscription to HBO. We all know how hard it is to crack a severe addiction to Entourage.