Rental Deposit Insurance: 11 Important Tips

Rental deposit insurance has gained popularity in Switzerland over the past few years. But before you sign up for deposit insurance on your rental home, take time to go over these key points by moneyland.ch.

1. The term “rental deposit insurance” in so much as it relates to renters can be somewhat misleading. The coverage provided by rental deposit insurance primarily benefits landlords, rather than you as a renter. If for any reason you cannot pay your rent, the insurance coverage ensures that your landlord receives the rent due. That does not mean that you will not have to pay the rent you owe, and you will still have to repay the amount in full.
    
2. Consider taking out a liability insurance policy as well, because your rental deposit insurance policy does not cover any costs that may fall on you as a renter, such as alleged damages to the property.
    
3. According to Swiss law, the deposit requested by prospective landlords cannot legally exceed the equivalent of three month’s rent and supplementary costs combined. If a property’s owner expects a higher deposit, you could consider making them aware of your legal rights.
    
4. Rental deposit insurance comes at a price. Use a rental deposit savings account instead, when possible. Doing so can save you several hundred francs annually.
    
5. If you cannot afford to cover the full deposit up front, or prefer to use the money for other purposes, then a rental deposit insurance does provide a solution. Just make sure you understand that rental deposit insurance is never obligatory, and a landlord cannot demand that you take out a rental deposit insurance policy.
    
6. There are big differences in the premiums and benefits that come with different deposit insurance policies. Comparing these ahead of time can save you hundreds of francs per year.
    
7. Make sure to compare all possible costs, including premiums and (minimum and maximum) administrative fees. Insurance premiums are usually given as a percentage of the rental deposit in question. Costs for your first year as a policyholder are often different from those for subsequent years. The moneyland.ch rental deposit insurance comparison tool helps you stay on the safe side: Total costs for the time period you specify, including the 5 percent stamp tax, are included in the results.
    
8. The time of year at which your policy takes effect also influences total costs. Results of the rental deposit comparison by moneyland.ch account for variables related to your policy’s starting date.
    
9. Check what the required notice of termination period and make sure to give notice by the deadline. Terminating some deposit insurance policies requires 3 months’ advance notice.
    
10. Be aware that many policies require minimum insurance terms. Some policies have minimum insurance periods as long as 3 years. We recommend you stick to policies with a 1-year insurance term.
     
11. If you need deposit insurance coverage for office space or other business rentals you should know that many deposit insurance companies also offer coverage for commercial property.

More information:
Rental deposit insurance comparison tool
Rental deposit accounts