Landlords / Guide
Posted at September 2, 2020

Empty or rented apartment, how to protect it?

Furnished or unfurnished rental, how to protect your property?

 

You own an apartment in Paris and have decided to rent it out. But is your apartment well-protected while looking for a tenant or during the rental period? Not so, and yet there is a specific contract to remedy this situation: it is the Non-Occupant Owner's Insurance (called PNO in French for Propriétaire Non-Occupant).

What is the use of non-occupant homeowner insurance?

PNO insurance is a type of home insurance for homeowners who do not live in the apartment. This insurance protects real estate, whether it is unoccupied, rented, or even occupied rent-free. Any home, even empty, can be subject to disaster: an exploding pipe, a short-circuit causing a spark to fire, etc.

However, this insurance is not compulsory for all landlord owners. Only people whose property is in a condominium must necessarily take out insurance for disasters that may damage the entire property or that of its co-owners. (source: https://assurance-habitation.dispofi.fr/proprietaire-bailleur).

The PNO insurance contract - also called CBNO insurance (for Complementary Non-Occupying Lessor) - should not be confused with the coverage for a secondary home. Indeed, a secondary residence is inhabited occasionally by the owner or his family, who then subscribes to regular home insurance.

What are the guarantees included in a PNO insurance?

Non-occupant homeowner insurance is very similar to the so-called multi-risk home insurance. It offers some equivalent guarantees:

  • Civil liability to cover damage caused to others,
  • Guarantees against the various possible disasters (fire, water damage, broken glass, theft, etc.).

But non-occupant owner insurance (French PNO) also offers guarantees relating to the rental of the property. These guarantees depend on the insurers, but it is possible to find:

  • Unpaid rents guarantee (GLI) to compensate the lessor owner if the tenant does not pay his rent.
  • A guarantee against the loss of rents following a disaster. If the home is no longer habitable, the insurance comes into play while repairs are being made.
  • Legal protection for the landlord in the event of legal action taken by the tenant.
  • A guarantee to cover the costs of relocating the tenant if the property is no longer habitable due to the lessor's negligence.

(source : https://www.april.fr/informations/focus-l-assurance-du-proprietaire-non-occupant)

Is Non-Occupant Homeowner Insurance beneficial?

Although PNO insurance is compulsory for property located in a condominium, it is reasonable to question its validity. Even if the apartment (or house) is rented, the insurance taken out by the tenant does not cover all possible damages. Therefore, PNO insurance supplements the tenant's coverage to protect the owner's property best. Besides, some damage is not the responsibility of the tenant (construction defect, pipe exploding due to frost, etc.). In this case, it is the PNO insurance or the condominium insurance that compensates the tenant (source: https://www.magazine-assurance.fr/assurance-proprietaire-non-occupant-toutes-raisons-de-souscrire/ ).

Non-occupant homeowner insurance is also useful between tenants. Indeed, the outgoing tenant cancels his home insurance when leaving the accommodation. If a claim occurs before the arrival of the next tenant, it will not be covered without PNO insurance.

Finally, PNO insurance comes at a reasonable cost, and insurance premiums are deductible from landlord income. Therefore, it is advantageous to protect your home throughout the year, whatever its rental situation.

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