Rent guarantee insurance (GLI)
Insurance taken out by a landlord to protect against unpaid rent and tenant damage. It covers unpaid rent, charges, and taxes, legal costs, and sometimes property damage. Its cost (approximately 2–4% of rents) is tax-deductible under the real property income regime. It generally cannot be combined with the Visale guarantee.
Key points
- It covers unpaid rent, charges, legal costs, and sometimes property damage.
- Its cost is typically 2–4% of annual rents, deductible under the real property income or BIC regime.
- The tenant must meet solvency criteria defined by the insurer to be eligible.
- It is incompatible with the Visale guarantee for the same property and tenant.
Frequently asked questions
What conditions must a tenant meet to be eligible for GLI coverage?
Criteria vary by insurer but typically include a net monthly income of at least 2.5 to 3 times the rent (including charges), a stable employment situation (permanent contract, civil servant, retiree), and no recent payment incidents. A tenant on a fixed-term contract or in a precarious situation will often be refused, which may lead the landlord to consider the Visale guarantee for such profiles.
How should a landlord choose between GLI and a personal guarantor?
A personal guarantor commits a third party (often a parent) personally, at no immediate cost to the landlord, but their solvency is hard to verify and recovery proceedings can be disappointing. GLI provides a formalised guarantee, professional support in case of non-payment, and coverage of legal costs. It is generally preferable for a professional investor seeking to secure rental income over the long term.
Why can GLI not be combined with the Visale guarantee?
The Visale guarantee is granted by Action Logement, a semi-public body, and is exclusive: it is the only guarantee admitted for the eligible tenant. GLI insurers refuse to cover a tenant for whom a Visale guarantee already exists, as this creates a double-indemnification risk and blurs liability in the event of a claim. The landlord must therefore choose one scheme or the other at the time of signing the lease.
In practice
A landlord rents a flat at €1,200/month and takes out GLI at 3%, costing €432 per year. In the event of prolonged non-payment, the insurer covers unpaid rent, charges owed, and bailiff fees, while the landlord deducts the premium from property income under the real-cost regime.
Official sources
- Unpaid rent: guarantor, insurance and guarantees · ANIL
- Borrower insurance for a mortgage · Service-Public.gouv.fr
- Law of 28 February 2022 (Lemoine Act) · Vie-publique.fr