Rent guarantee insurance in Marbella: what happens if your tenant stops paying

If you rent out a property in Marbella or anywhere along the Costa del Sol, you've probably asked yourself this question more than once: what if my tenant stops paying? Rent guarantee insurance in Marbella exists precisely so that worry doesn't keep you up at night. In this article, we explain how it works, what it covers, and why more and more landlords in our area are taking it out.

What is rent guarantee insurance and what does it cover exactly?

Rent guarantee insurance — also known as rental income protection — is a policy that protects the landlord when a tenant stops paying their monthly rent. Instead of waiting months whilst you continue to cover the mortgage or property expenses, the insurer advances the outstanding monthly payments to you.

But the cover doesn't stop there. Most policies also include:

• Unpaid monthly rent: generally between 6 and 12 months' rent, depending on the insurer and the product chosen.
• Legal defence and eviction proceedings: solicitors, legal representatives and court fees are covered by the insurer. If you'd like to know more about this cover independently, we also offer a dedicated legal defence insurance policy.
• Malicious damage by the tenant: many policies cover damage deliberately caused by the tenant to the property upon leaving, up to a set limit.
• Recovery of other debts: utility bills, community fees or other outstanding amounts left unpaid by the tenant.

What is required to take out rent guarantee insurance in Marbella?

This is the key point that many landlords are unaware of: before issuing the policy, the insurer carries out a tenant solvency assessment. This means they analyse whether the person moving into your property has sufficient income and a clean credit history.

Typically, they require that the rent does not exceed 30% to 40% of the tenant's net income, and that the tenant does not appear on any credit default registers. This preliminary screening is, in fact, an advantage: if the tenant passes the assessment, the risk of non-payment already decreases considerably.

At Segurmar, we manage this assessment with a range of insurers and help you interpret the results before you sign anything.

How is it different from home insurance?

This is a very common question. Home insurance covers material damage to the property (fire, water damage, theft, etc.), but it does not cover unpaid rent, nor the costs of eviction proceedings, nor intentional damage caused by the tenant upon leaving.

Both policies are complementary, not mutually exclusive. In fact, if you are letting your main residence, we recommend having both active. You can find out what a good rent guarantee insurance policy includes and combine it with the appropriate home cover.

What if I rent my property as holiday accommodation?

An important clarification: rent guarantee insurance is designed for long-term tenancies governed by the LAU (Spanish Urban Leasing Act). If you rent your property by the day or week through platforms such as Airbnb or Booking, your needs are different.

For that scenario, we explain everything in our article on holiday let insurance in Marbella: what your home policy doesn't cover. The Costa del Sol has a very active holiday rental market, and specialist cover makes a significant difference.

Frequently asked questions about rent guarantee insurance

Does cover begin from the first month of non-payment?

It depends on the insurer, but many policies activate cover from the first month of non-payment, once the claim has been reported. Some have a short waiting period at the start of the contract (typically 1 to 3 months from the date of signing), so it is important to take out the policy before the tenancy begins or immediately upon signing.

What if the tenant damages the property?

Most policies include cover for vandalism or intentional damage caused by the tenant, up to a maximum amount that varies by insurer (typically between €3,000 and €6,000). It is essential to review this limit carefully before taking out a policy.

Is a solvency check carried out on the tenant before I take out the policy?

Yes, and that works in your favour. The solvency assessment is free of charge and gives you peace of mind even before you sign the tenancy agreement. If the tenant does not pass the screening, it is better to know in advance.

What does it cost, roughly speaking?

The premium typically falls between 3% and 5% of the annual rent. For example, for a rental of €1,200 per month (€14,400 per year), the annual premium would be in the region of €430 – €720. In return, you can have up to 12 months' rent guaranteed, full legal defence cover and protection against damage. Many landlords on the Costa del Sol see it as an investment rather than an expense.