A rental investment is a long-term investment that is meant to last a long time. The best way for it to continue to earn you money over time and not be a source of financial instability is to protect it properly. Losses are rarely predictable, but their consequences can reach hundreds of thousands of euros, which is why it is necessary to conclude a contract with an insurance company that will cover these amounts if necessary. The right option when renting a property is to opt for Occupant Owner’s Insurance, we will explain everything you need to know about this insurance.
Understanding PNO insurance
Definition of PNO insurance
As the name suggests, non-residential owner insurance is designed to insure the property of an owner who intends to rent it out and therefore does not occupy it himself.
When a home is rented, it is usually covered by renter’s home insurance. Nevertheless, there are several cases in which tenant’s household insurance cannot be arranged and for which PNO insurance can be applied for.
- The accommodation is empty: if a disaster occurs while the accommodation is unoccupied, it is of course not covered by home insurance. This can be the case, for example, between the departure of one tenant and the arrival of another.
- The tenant has given notice of departure: if there is water or fire damage while the tenant has already notified the owner of departure, it is up to the owner’s insurance to take over according to IRSI Convention.
- The loss is due to a building defect or lack of maintenance by the landlord: in these two situations, the tenant’s home insurance will refuse cover and switch to PNO insurance.
Roles and guarantees offered by insurance
PNO insurance offers the owner complete home protection, actually covering losses caused by fire, water damage, natural disasters, broken glass, theft or vandalism. Material damage caused to the rental investment is covered by the insurer, and the insurer can also compensate the owner for additional costs that sometimes arise after a disaster (e.g. technical expertise).
Another important aspect of PNO insurance is that it guarantees the civil liability of the owner, that is, it covers him if his property causes damage to the property of a neighbor or to the common parts of the complex. For example, imagine a water leak that bursts in the landlord’s house due to damaged pipes and that leads to infiltration between the neighbors, in this case the owner is subject to civil liability. likewise, if a visitor is injured due to, for example, a faulty staircase, this is also the civil liability of the owner. In other words, it is PNO insurance that will cover the medical costs associated with this bodily injury as well as its consequences (inability to work, etc.)
The importance of PNO insurance for landlords
PNO insurance is only mandatory if the rented accommodation is located in a condominium. Actually it is Alur’s Law which imposes it, it is a financial protection of the owner so that he does not have to personally return colossal sums in the event of a disaster, but it allows all damages to be dealt with quickly and the necessary repairs to be carried out without delay.
In the case of individual accommodation, PNO insurance is simply strongly recommended.
What to look out for when choosing PNO insurance
The nature of the property, its location and its value
The premium for PNO insurance naturally fluctuates according to certain criteria. Geographical location is part of this, if the property is in an area particularly prone to natural disasters, this can be seen both in quantity and if the accommodation is in a neighborhood with a higher than average crime rate.
The nature and value of the property also affects the cost of PNO insurance: insuring a large area of the house will be more expensive than insuring a small area. For an apartment in a building, the quality of the building and any security system (digital code, intercom, badge, etc.) are also taken into account. An apartment in a recent, well-protected building will undoubtedly represent lower insurance premiums.
Necessary Warranties, Deductions and Warranty Exclusions
Companies offering PNO insurance often suggest subscribing to other additional options, such as the Guarantee of unpaid rent, which, as the name suggests, allows you to cover the amount of rent in the event of non-payment by the landlord.
PNO insurance policies often include a deductible, which is the amount the owner must pay in the event of a loss before the insurer begins to compensate. The co-payment is expressed as a flat rate or as a percentage of the insured value. The higher the deductible, the lower the premium.
The insurance contract always contains exclusions from the warranty, i.e. situations where insurance cannot be arranged or it may also apply to certain parts of the house that are not covered. This could be, for example, outdoor equipment (trees, pool vegetation, spas, etc.) that are not covered by the insurance. Generally speaking, losses related to wild animals, commercial use of housing, certain natural disasters (earthquakes, etc.) or voluntary damage by the landlord are not compensated.
Choose a contract
Reviews of insurance companies
There are a large number of players in the insurance industry in France. Competition is fierce between well-established companies, online insurance companies, subsidiaries and new entrants in the market, and business policies are sometimes tough.
You should not hesitate to take the time to compare different offers, read between the lines, appreciate the notoriety, reputation and solidity of each company. When you take out an insurance contract, it is for a minimum of one year, so you need to be careful.
Customer reviews taken into account
Today, when we want to form a more specific opinion about the contract, it is good to consult insurance reviews. This feedback is made up of both the opinions of insurance specialists who examine the specifics of the contracts and the verified opinions of customers. The whole presents reliable and unbiased information to identify the advantages and disadvantages of different insurance products and ultimately to inform the choice.