Rent-Default Insurance for Landlords in Spain

Q: What is rent-default insurance in Spain?

It is seguro de impago de alquiler — a landlord policy that pays your rent (typically for 6, 9 or 12 months) when a vetted tenant stops paying, and covers the legal cost of eviction and often malicious damage by the tenant. It protects your rental income, not the building itself, which needs a separate landlord home policy.

A tenant who stops paying is every landlord's worst case. Here is how impago de alquiler (rent-default) insurance works in Spain, the tenant-vetting catch, the rules the LAU imposes on you, and what actually happens if you have to evict.

By Andrew Turner — exclusive Generali agent since 2007DGS Registry C0467B54657010Last reviewed July 2026

If you own a property in Spain and let it out long-term, one risk dwarfs all the others: a tenant who simply stops paying the rent and refuses to leave. Recovering the property through the courts can take many months, during which you receive nothing but still pay the mortgage, the community fees and the IBI. Rent-default insurance (seguro de impago de alquiler) is designed for exactly this — it pays your rent when the tenant doesn't and covers the cost of the eviction. This guide explains what it covers, the vetting hurdle every policy imposes, the LAU rules that frame the whole arrangement, and how the eviction process really works.

The short version

Rent-default insurance pays your rent (typically 6, 9 or 12 months) when a vetted tenant stops paying, and covers the legal cost of eviction.
There is a catch: the insurer must vet the tenant first (an estudio de solvencia). A tenant who fails the study can't be covered.
Cost is roughly 3–5% of the annual rent — and it is tax-deductible against your rental income.
A tenant who signs a contract and then stops paying is not a squatter — it's a civil matter, handled very differently from okupación.
The LAU ties you to a 5-year minimum term (7 if you let through a company) and a 1-month deposit.
Most expat landlords are small holders, so the 2023 Housing Law's tough gran tenedor rules do not apply to them.

What rent-default insurance covers

A seguro de impago de alquiler is not a home policy — it is protection for the landlord's income. The core covers, which vary in detail by insurer, are:

Unpaid rent. The insurer pays the rent the tenant owes, usually for a chosen period of 6, 9 or 12 months (some products extend to 18). Payment typically begins once legal action has been started, and many policies carry a one-month excess (the first unpaid month is yours).
Legal defence and eviction costs. The lawyer (abogado), court agent (procurador) and the whole desahucio (eviction) action, usually up to a per-claim limit in the region of €3,000–€10,000 depending on the insurer.
Malicious damage by the tenant. Vandalism or deliberate damage (actos vandálicos) discovered after an eviction — but note the sub-limits here vary enormously between insurers, from a few hundred euros to a few thousand.

Squatter (okupa) cover is usually separate. A rent-default policy protects you against a tenant who stops paying. Cover for illegal occupation by people who never had a contract is generally a distinct add-on or a separate product — don't assume one policy does both. More on this distinction below.

The tenant solvency study — the catch

This is the part landlords most often misunderstand. You cannot simply insure any tenant against non-payment. Before it will issue the policy, the insurer runs a solvency study (estudio de solvencia) on your prospective tenant — and if the tenant fails, there is no cover. Typical requirements:

Income vs rent. As a rule of thumb the rent should be no more than around 35–40% of the tenant's net income — put another way, their income should be roughly 2.5 to 3 times the rent. The exact figure is insurer-specific.
Employment. A permanent contract (contrato indefinido) past its probation period is preferred; on other contracts, a year or more in the job is usually expected. The self-employed show tax returns; pensioners a pension certificate.
No debt-registry entries. The tenant must not appear on default registries such as ASNEF. An entry is normally an automatic rejection.

If a tenant falls just short, insurers will often accept a guarantor (avalista) or a co-tenant whose combined income meets the threshold. The practical lesson: choose and reference your tenant carefully before you sign — the insurance is only as good as the vetting behind it.

What it costs

Premiums are quoted as a percentage of the annual rent — typically around 3% to 5%, with higher-coverage tiers costing more. On a €1,000-a-month flat (€12,000 a year) that is broadly €350–€600 a year, though the exact figure depends on the tenant profile, the cover period and the insurer. Two things worth knowing:

The landlord pays the premium (you may agree the tenant reimburses it, but the policy is yours).
The premium is a deductible expense against your rental income for tax, alongside the mortgage interest, IBI, community fees and repairs.

Perspective: a single month of unpaid rent usually costs more than a whole year's premium — and a contested eviction can run to the better part of a year with no rent at all. For most landlords the sum is easy to justify.

A non-paying tenant is not a squatter

Spanish headlines blur the two, but the law does not, and getting it wrong can wreck a case. A tenant who signed a contract and then stopped paying is a contractual matter: you recover the property through a desahucio por impago (eviction for non-payment) under the LAU, and you can claim the arrears as a debt. An okupa — someone occupying with no contract and no right — is a different problem entirely, pursued through possessory or criminal routes, not a rent eviction.

The distinction decides which court procedure you use, what you can recover, and how fast it moves. Use the wrong one and the claim can be thrown out. Our companion guide covers the squatter side in depth — see squatters' rights in Spain and how to protect your property. This article is about the far more common situation: a real tenant who has fallen into arrears.

The LAU rules every landlord must know

Long-term residential lettings are governed by the Ley de Arrendamientos Urbanos (LAU). Three national-law points frame everything:

Minimum term (Art. 9). Whatever term you write, the tenant can stay by annual renewals up to 5 years if you are a private individual, or 7 years if the landlord is a company. You are bound for that minimum; the tenant can leave earlier with notice.
Further extension (Art. 10). After the minimum term, if neither side gives notice the contract rolls on by annual periods up to 3 more years.
Deposit (Art. 36). A cash deposit of one month's rent is compulsory for residential lets (two months for non-residential).

Where the deposit goes depends on your region. The deposit itself is national law, but whether you must lodge it with a regional housing body is set by each autonomous community. In the Valencian Community (Costa Blanca), for example, it must be lodged within one month; some regions don't require lodging at all. Check your community's rule.

The 2023 Housing Law — what changed, and what didn't

The Ley 12/2023 “por el derecho a la vivienda” (in force 26 May 2023) made headlines and worried a lot of overseas owners. For the typical expat landlord, most of it does not apply — but it is worth understanding why.

“Gran tenedor” (large holder). The toughest obligations fall on large holders — owners of more than 10 urban residential properties (or over 1,500 m²), reduced to 5 or more inside a formally declared stressed zone. Almost every expat with one or a few Spanish properties is a small holder (pequeño tenedor), so these rules simply don't reach them.
Stressed-zone rent caps. Where a region declares a zona de mercado residencial tensionado, rents on re-lets are capped. Adoption is patchy and politically contested — Catalonia and a few others have declared zones, but the Valencian Community has not, so those caps currently do not bite on the Costa Blanca.
The eviction pre-conditions were struck down. The 2023 law originally forced large holders to obtain a tenant-vulnerability report and attempt conciliation before evicting. The Constitutional Court annulled those requirements in January 2025 (STC 26/2025), so they are no longer live obligations.

In short: the core law stands, but its heaviest provisions target large holders and formally declared zones — not the ordinary private landlord letting one home on the coast.

If a tenant stops paying: the eviction process

If the worst happens, recovering the property follows a set civil path. In outline:

Formal demand. A written demand for the arrears, usually by burofax so you have dated proof, and formal notice that you will act.
The claim (demanda de desahucio). A non-payment eviction is filed as a juicio verbal, combining recovery of the property with a claim for the unpaid rent.
The tenant's one chance to cure (enervación). A tenant can stop the eviction by paying everything owed — but only once. If they fall into arrears again, that option is gone.
Judgment and eviction date (lanzamiento). If the tenant neither pays nor leaves, the court sets a date for physical eviction.

Realistically the whole process commonly takes somewhere between eight and eighteen months depending on the court's backlog — which is precisely why the rent-default cover and its legal-defence element matter so much. Throughout, your insurer's policy keeps the rent coming in and pays the lawyers. For the wider claims picture, see our guide to insurance claims in Spain.

What Generali offers — and how we help

Generali provides landlord cover in Spain, including a rent-default (impago de alquiler) option that pays unpaid rent for up to 6, 9 or 12 months, funds the legal defence and eviction, and covers malicious damage after an eviction — subject to the tenant passing the solvency study (Generali will not issue if the rent exceeds around 35% of the tenant's income). It also includes legal assistance where a home is taken by illegal occupation.

As authorised exclusive Generali agents, we set this up in plain English, run the tenant study for you, and pair it with the right landlord buildings and liability cover so the property itself is protected too — not just the rent. If a claim ever arises, we handle it with you from the first missed payment.

Letting a property in Spain?

Protect your rent and your property before a tenant moves in. We arrange landlord and rent-default cover for owners across Spain, run the tenant solvency study, and explain every step in English. Free, no-obligation review.

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Frequently asked questions

It is seguro de impago de alquiler — a landlord policy that pays your rent (typically for 6, 9 or 12 months) when a vetted tenant stops paying, and covers the legal cost of eviction and often malicious damage by the tenant. It protects your rental income, not the building itself, which needs a separate landlord home policy.

Roughly 3% to 5% of the annual rent, so on a €1,000-a-month flat broadly €350–€600 a year, depending on the tenant profile, the cover period and the insurer. The landlord pays the premium, and it is a deductible expense against rental income for tax.

No. The insurer must vet the tenant first with a solvency study, and a tenant who fails it cannot be covered. Typically the rent should be no more than about 35–40% of the tenant's net income, the tenant should have stable employment, and must not appear on default registries such as ASNEF. A guarantor can sometimes bridge a shortfall.

No — and the difference matters. A tenant who signed a contract and then stopped paying is a contractual case, recovered through a desahucio por impago under the LAU, with the arrears claimed as a debt. An okupa has no contract and no right, and is dealt with through separate possessory or criminal routes. Using the wrong procedure can get your case dismissed.

Commonly eight to eighteen months, depending heavily on the local court's backlog. The tenant also has one chance to stop the eviction by paying everything owed (enervación), but only once. A rent-default policy keeps your income coming in and pays the legal costs throughout.

For most expat landlords, no. The strict obligations target “large holders” (more than 10 properties) and formally declared stressed zones. Almost every owner of one or a few properties is a small holder, and regions such as the Valencian Community have not declared stressed zones, so the rent caps do not apply there. The tough gran-tenedor eviction pre-conditions were also struck down by the Constitutional Court in 2025.

Under the LAU a residential deposit is one month's rent, and the tenant can renew annually up to a minimum of 5 years (7 if the landlord is a company), then up to 3 further years. Whether the deposit must be lodged with a regional housing body depends on your autonomous community — in the Valencian Community it must be lodged within a month.

Yes. As your exclusive Generali agents we arrange rent-default and landlord home cover across Spain, run the tenant solvency study, and handle any claim with you from the first missed payment — all in plain English. Call 966 461 625 or use our contact page.

About the author. Andrew Turner is an authorised exclusive Generali agent based in Jávea, Alicante, with over 25 years of insurance experience in Spain (DGS C0467B54657010). Turner Insurance Specialists helps English-speaking property owners across Spain protect their rental income and their homes — and handles claims, including rent-default and eviction, in plain English. More about us · Contact the team.

Sources & references: Ley 29/1994 (LAU) and Ley 12/2023 “por el derecho a la vivienda”, BOE; Constitutional Court judgment STC 26/2025; Generali landlord and rent-default product pages; insurer and comparator definitions of seguro de impago de alquiler (Mapfre, ARAG, Mutua de Propietarios, idealista). Cover terms, limits, prices and regional rules vary and can change — confirm the current detail on your own policy and with a lawyer for legal matters. This guide is general information, not legal or financial advice.