Attractive prices: the tree that hides the forest!

7 August 2017 By: Index Caution0 comments

The pricing policies of guarantee companies may seem clear and simple to understand at first glance.

It would initially seem that annual premiums range from 4% to 5% of the amount of the rental guarantee, according to the guarantee companies. So you can already narrow things down!

A first round allows us to see that the annual premium rates range from 4% to 5% of the amount of the guaranteed rent guarantee according to the surety companies. What already make a first choice!

After further analysis, we find that the annual premium rate should not be the sole criterion for deciding whether to join one of these institutions. Expenses – false fees and hidden fees must also be considered. In the end, it is you who will pay the bill and these costs are not insignificant.

The various practices used in calculating the “guarantee” premium for guarantee companies:

• The method of calculating the premium in the first year and the following years

In the first year, the guarantee companies offer either lump sum or pro rata temporis premiums, taking into account the end date of the guarantee contract.

• Promotional conditions

Certain companies – aiming of attract as many customers as possible – offer exceptionally low premiums do not charge tenants to join their institutions.

• Disparity in General Conditions

The general conditions of insurance (CGI) of the various guarantee companies are highly ingenious.

Below you will find explanations for the lower expenses and fees which are/will be charged to you:

• Annual management fee of CHF 20 (used to finance annual billing!)
• Administrative costs of CHF 50 for any changes to the insurance certificate;
• Administrative costs of CHF 20 in case of termination by the policyholder
• Administrative costs of CHF 100 in case of release of the guarantee with incidents
• Administrative costs of CHF 50 in case of change of provider
• Customer hotline, cost raised to CHF 2.30 / minute.

We can only say that a simple assessment, based on a premium rate or an advertisement, is not sufficient to form an objective opinion on the total cost of the rental guarantee insurance premium.

We advise you to be cautious before taking the leap.

Your Guarantee !