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Insurance makes sense when the expected cost of a default exceeds the annual premium. For most Portuguese landlords, the math favors insurance.
The problem
‘It is just another expense.’ That is the usual objection — until the first default. Risk is invisible until it happens, and devastating when it does.
The rational calculation
- Cost of insurance — annual premium, typically a small percentage of the annual rent.
- Cost of risk — probability of default × average loss (€5,400–€10,800).
- Additional coverage — legal support and process management.
When the insurance pays for itself
With 25% of landlords reporting delays in a three-year period, the probability is not negligible. Simply avoiding a single prolonged default pays for the insurance several times over.
Frequently Asked Questions
How much does rent insurance cost on average?
The premium varies with the rent and the tenant’s profile; it is typically a small fraction of the annual rent.
