Which is the validity period of the local bond insurance?
The coverage of insurance begins and ends at 24 o’clock in the given date in the policy. Even after its maturity, the foreseeable risks will remain covered until the tenant completes its obligations, except for cases of cancellation or loss of the right to cover.
The owner of the property (lessor / insured) can choose the period of validity according to the type of lease that will be made, that is, residential, non-residential or commercial. The standard model of the general conditions of the policy, provided by the Superintendency of Private Insurance (Susep), establishes the basic rules to define the period of validity of the coverages, allowing variations as long as the insurers submit the insurance plans to their approval.
Generally, insurers offer the following options, depending on the purpose of the rental of the property:
- Annual validity, with guaranteed renewals until the delivery of the keys, by means of a new premium payment at the end of each 12-month period. No further analysis of the tenant’s registry is required.
- Duration for the period of the lease, limited to a maximum term of five years. The renewal is optional at the end of the contract, with the possibility of the insurance being renewed if the lease contract becomes effective for an indeterminate period. In this case, the validity period shall be 12 months.
Non Residential and Commercial Lease
- Duration corresponding to the period of the lease, which shall be a maximum of five years. The renewal is optional and depends on a new analysis of the cadastre.
- Retroactive effect for a lease agreement already in force on the date when the insurance proposal was filed with the insurer.
Can the insurer refuse a proposal to take out the insurance?
Yes. The insurer can accept or refuse insurance. The response must be given up to 15 days from the date of protocol of the insurance proposal. This period also applies to voluntary renewal of the policy and to changes in risk. However, when the premium is paid prior to the acceptance or non-acceptance of the risk, the insurer will be responsible for any claims that occur during the same period of fifteen days plus two business days.
This period is for the insurer to evaluate and calculate the risk, and may request additional documents, provided that it presents a well-founded justification. For individuals, the request can be made only once. For legal entities, there is no limit to the number of requests. If the analysis process is interrupted, the period of 15 days is suspended and will only be counted from the date on which the requested documentation is delivered.
In the event that the insurer does not manifest itself in relation to the proposal to contract the insurance, within that period of 15 days, the acceptance will be automatic. But if the insurer declines the risk of a candidate who has paid the full or partial premium, the amounts will be returned with monetary restatement. The insurer has 10 calendar days to make a full refund or proportional discount (pro rata temporis) to the period in which you have guaranteed the risk coverage. If there is a delay in the refund, the insurer will pay default interest in addition to the monetary correction.
How is the renewal made?
Locatícia bail insurance does not have automatic renewal. The owner of the property must request it upon payment of a new premium. The request must be made no later than the thirtieth day after the expiration of the policy. Otherwise, the insurer may not renew the insurance. If this happens, you will need to re-register the tenant.
What should the property owner do when the insurance renewal coincides with the late payment of the rent?
The period that includes the first unpaid rent until the court order of eviction is called ” loss expectation “. Assuming that the insurance renewal occurs exactly during that period, the insurer is not obliged to renew it.
Even if the owner of the property is negotiating with the insurer to overcome this impediment, he must file an insurance proposal for issuance of a new policy. The initiative must be taken within 30 calendar days, starting from the expiration date of the policy with expected loss, to ensure the continuity of the insurance coverage.
Can I cancel my policy during the term of the local bail bond insurance?
Yes. This agreement can be canceled at any time, provided that in agreement between insurer and insured (lessor).
When the rescission is at the request of the owner of the property (insured / lessor), it must be accompanied by the receipt of delivery of the keys and declaration that there are no debts or damages related to the property. The date of cancellation will be the same as the delivery date of the keys. In addition to deducting the Tax on Financial Transactions / IOF (emoluments), the insurer may retain at most the premium (price paid for insurance) calculated by the Short Term Table. This table establishes the relation between time paid and time used.
In the event that the initiative of termination is from the insurer, it must return the premium received after deducting the fees and the proportion proportional to the time the insured was covered by the insurance.
A policy, valid for one year (365 days), was contracted for an annual premium of R $ 2,600.00 and Tax on Financial Operations / IOF (emoluments) of R $ 200.00. On the assumption of cancellation 60 days after hiring, the calculation of return of the premium can be done as follows:
At the request of the insured – for the 60 days of coverage, the insurer has the right to retain, according to the Short Term Table, 30% of the annual premium plus emoluments.
Prize retained = R $ 200,00 (emoluments) + (R $ 2,600.00 x 30%) = R $ 980,00
At the request of the insurer – to find the ratio between the effective term of the policy of 60 days and the contracted term of 365 days, it is divided by the other. The result is multiplied by 100 to find the percentage of the proportional part of the premium to which the insurer is entitled. In the example, the ratio is 16.44%.
Retained premium = R $ 200,00 (emoluments) + (R $ 2,600.00 x 16,44%) = R $ 627,44
Amount to be refunded to the insured: R $ 2,600.00 – R $ 627.44 = R $ 1,972.56
Can the insurance contract be canceled without refund of what has already been paid?
Yes. The bond insurance is automatically canceled in the following situations:
- Failure to pay the premium (insurance value) in cash or the first installment.
- False, incorrect, or omitted statements of circumstances known to the insured (owner of the property / lessor) and could influence the acceptance of the risk by the insurer and in the calculation of the premium price.
- Death of the tenant (guaranteed) without there being legal successors of the lease.
- Serious or gross negligence of the insured (owner of the property / lessor).
What is the penalty if there is a delay in the installment payment of the insurance premium?
In the event of non-payment of one of the installments following the first installment, the coverage period will be reviewed, according to the fraction provided for in the LINK Short-Term Table for the above Table. However, if the owner of the property or the tenant pays the debt with the charges charged for the delay, the initial term of validity of the policy is reinstated.