Crossing Your Fingers Isn’t Enough Anymore

Last Updated: August 6, 2019By

By Eric D. Jarvis, Esq., Founder of ReassureRent

Tenant screening has long been the method by which rental property owners have protected themselves against unplanned vacancies.  Ask almost any landlord or property manager, and they will tell you that they do excellent screening and have never had an eviction.  And yet, according to the Orange County Register, 499,010 unlawful detainer cases were filed over the last three years in California. The status quo of using tenant screening alone is not enough to protect a property owner’s rental income.  California owners and managers now have a new tool to ensure that their rental income is protected – tenant default insurance.

Conscientious landlords run background and credit checks on their prospective tenants.  It is common belief that renters with higher income levels, a strong credit history, and a history of making rent payments on time are less likely to default on their lease by not paying rent.  So, we have long been taught to obtain credit reports, screen income levels, and check on prior evictions of our prospective tenants as well as we reasonably can. There are many competing providers of tenant screening reports, and these reports are often accessible through apartment associations.  These steps help reduce the likelihood of tenant default, but are not completely foolproof. 

Just google “tenant horror story” and “looked good on paper” to find many examples of tenants who passed every benchmark on their tenant screening, but ended up becoming expensive liabilities.  The tenant stops paying rent, and then employs multiple strategies to hold out in the unit for months, costing the landlord time, money, and emotional aggravation. The loss of rents, legal expenses, and attorneys’ fees pile on top of the landlord’s continuing obligations to pay the mortgage, insurance, and property taxes the entire time.  None of this is predicted, prevented, or cured by a screening report alone.

Now, there is a way for California property owners and managers to guaranty the rent, even if a defaulting tenant slipped through the screening process – ReassureRent tenant default insurance.  Purchased by the landlord at the time of a new move-in, tenant default insurance is an actual insurance policy which protects the landlord against the default of that tenant for nonpayment of rent.  If there is such a default, this insurance will hire and pay for the eviction attorney and court costs, up to $1500, and manage the eviction. More importantly, it will reimburse the landlord for the missing rent, from the day the original rent was due through the day the property is restored back to the landlord’s possession, up to six months (subject to a small deductible).  

Tenant default insurance has long been used in the United Kingdom and Australia as a way for landlords to protect their rental income, but has only recently been made available in California.  One such insurance program is the ReassureRent tenant default insurance provided by eRLY Insurance Solutions, Inc. Under that program, the average cost of the insurance is about 2.5% of annual premium, or the equivalent of about $50 per month (varying by location and monthly rental amount).  ReassureRent has quickly gained the attention and support of California apartment owner associations, including the Apartment Association of Greater Los Angeles, who see this as an emerging and valuable advancement in the protection of their landlord members

Tenant screening alone has been the primary method by which landlords have protected their rental income, and continues to be a valuable risk management tool.  Now that tenant default insurance has become available in California, prudent landlords are able to backstop that screening with a rental income insurance policy.  The new way of protecting rental income, by combining tenant screening with a tenant default insurance, is better than the old way of crossing your fingers and hoping for the best!

Eric D. Jarvis is the founder of ReassureRent tenant default insurance.  Eric is also an attorney, who, prior to his 20 years as an insurance professional, practiced landlord/tenant law in Southern California.  ReassureRent can be reached at (833) 5TENANT (833-583-6268), and at


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