What is DepositFree™ Insurance and How does this help you as a Landlord?
Canopy DepositFree™ is an affordable alternative to upfront cash deposits which speeds up the lettings process and reduces risk of void periods.
- You get more protection at no cost
- Your property could become more marketable to renters. Instead of a renter having to find a 5 week cash sum, they can purchase Canopy DepositFree™ insurance for typically 10% of 8 weeks rent.
- You enjoy greater protection. Canopy DepositFree™ offers landlords 8 weeks cover as opposed to 5 weeks with a traditional cash deposit.
- It also covers the tenant for major life events. For instance if the tenant’s employer reduced their salary by at least 25%, in accordance with the written terms of their contract of employment.
What does Canopy DepositFree™ insurance cover?
Canopy DepositFree™ offers Landlords up to 8 weeks of deposit protection. Any risk typically covered by a traditional cash deposit is also covered by a Canopy DepositFree™ insurance policy.
- Accidental and malicious damage
- Rental arrears
- Additionally, the tenant is covered, should they lose their job for reasons that were beyond their reasonable control
*Please note communicable diseases such as the on going COVID-19 pandemic are not covered.
Who buys the policy and how much does it cost?
The tenant buys the policy. The cost of a policy is 10% of 8 weeks rent for a 1 year lease, 15% for a 2 year lease and 20% for a 3 year lease. Plus Insurance Premium Tax (currently at 12%). It’s a one off premium that covers the initial term of the tenancy contract. If a tenant extends their tenancy, then their policy can be renewed. Once a tenant has completed Canopy’s screening process, and they have a credit rating of poor or above, and no active CCJ’s they are eligible for DFI. You must also ensure they meet the affordability of the property's rent.
What if you need to make a claim?
- Claiming works in the same way a traditional cash deposit claim is settled. Agreement of a claim will be required from all parties.
- If at the end of the tenancy, if the tenant does not make a payment to you in settlement of any financial loss or damage, then you can submit a claim to Canopy.
- As with cash deposit, tenants sign an inventory check-in report and an inventory check-out report which is the basis of any reasonable claim. Claims are capped at the coverage limit being 8 weeks deposit.
- Canopy aim to pay all un-disputed claims in 2 workings days or sooner.
What happens if there is a claim at the end of Tenancy Agreement?
Tenants must settle this with the landlord directly at the end of the tenancy. If, at the end of the tenancy, the tenant does not make a payment to you in settlement of any financial loss or damage, then 360
Global (Canopy’s claims management partner) will settle the claim with you, and then collect any monies owed from the tenant. You must make any claims within 90 days of the end of tenancy or if the renter vacates the property (whichever comes first)