What to know about GLI (rent guarantee insurance)

Rent guarantee insurance (GLI) is insurance that reimburses the owner for rent a tenant doesn’t pay, starting from the first month of unpaid rent, along with legal costs and some damage. It generally costs between 2.5% and 5% of the annual rent and is one of the common tools of long-term rental management.

It isn’t mandatory, but it can save you when you’re dealing with an unreliable tenant or damage. Here’s everything you need to know to decide whether it’s right for you.

What rent guarantee insurance (GLI) actually is

Rent guarantee insurance protects you against certain rental risks. If your tenant doesn’t pay rent, the insurer quickly reimburses what’s owed. On top of unpaid rent, GLI generally covers eviction and collection costs, as well as any damage to your property.

The benefits of GLI for owners

The main benefit is financial security: from the first month of unpaid rent, you’re reimbursed, so you can keep paying your own costs (like your mortgage) without stress. GLI also handles the legal steps in a dispute, which saves you time.

Another plus: if you’re taxed under the actual (réel) regime, you can deduct unpaid-rent insurance premiums from your rental income, as long as you don’t combine that deduction with the tax credit available separately for the same policy.

The limits and drawbacks of GLI

GLI has a cost, generally between 2.5% and 5% of your annual rent: something to factor in if your margins are tight. Taking out a policy also comes with eligibility conditions: your tenant has to show solid finances (a permanent contract, stable income), which can make things harder if you want to rent to less established profiles. Reimbursement terms vary from one insurer to another, so take the time to read your policy.

GLI or guarantor: can you combine both?

No, with one exception. An owner who has taken out GLI (or any other coverage for unpaid rent) can’t also require a guarantee agreement, or the clause is void. The only exception is homes rented to a student or an apprentice, where combining them is still allowed. On the other hand, nothing prevents you from combining GLI with the security deposit, which is owed in every case: they’re two different mechanisms.

If you want to understand the other guarantees you can ask a tenant for, such as a traditional guarantor, it’s good complementary reading.

What you risk without GLI

Without GLI, you’re exposed to several risks. The most obvious is unpaid rent, which can put you in difficulty with your mortgage or your bills. If there’s damage, you’ll have to front the repair costs, and the legal steps to get your money back can be long and expensive. You can limit that risk upfront by knowing how to find a reliable guarantor, or by planning ahead on how to protect yourself from unpaid rent for free.

How to choose the right GLI

Compare offers from insurers and banks, or go through a broker to find the best deal. Some companies, like Cautioneo, offer 100% digital plans with flexible options and a reasonable cost (starting at 2.75% of the rent). Their strength: they verify and certify the tenant’s application before signing, for peace of mind from the start.

If you want even more peace of mind in managing your properties day to day, also think about setting your rent correctly: it’s the first protection against vacancy and unpaid rent.