Frequently Asked Questions Canopy
Rental deposits can be expensive to save up for, especially if you’re looking to move out in a hurry or are already renting. If you’re considering renting a new property, you might want to take a look at a deposit free insurance policy with Canopy.
Here’s what you need to know about how rentals with Canopy work, what are the benefits, terms and conditions.
What is Canopy?
Canopy is a deposit free renting company who aim to make it cheaper, faster and more comfortable for both renters and landlords to rent a property. Canopy rentals aim to replace traditional large cash deposits which can be expensive and particularly difficult to save for if you are already renting.
How do Canopy Rentals work?
Canopy offers the DepositFree™ insurance policy as a replacement for the traditional and expensive security deposit. DepositFree™ insurance means that on average tenants pay 10% of 8 weeks rental instead of a deposit. Once the policy has been paid, renters are free to move into their new home.
When applying for a DepositFree™ insurance policy, you need to follow these steps;
- Step 1: The tenant needs to sign up to Canopy and create a Canopy 'rent passport', where they will then receive their instant quote for their deposit.
- Step 2: Next, the tenant will need to share their rent passport with an estate agent or with their current or potential landlord.
- Step 3: Either the landlord or the estate agent will then sign the tenant up to Canopy. They will then invite the tenant to purchase their DepositFree™ policy.
Once the tenancy comes to an end, the tenants are free to walk away. If the tenants have been responsible for causing damage to the rental property or have not paid their rent on time, they will be subject to charges.
What are the benefits of Canopy?
There are many benefits for renters who wish to use a deposit free insurance policy;
1. Renters are covered: The insurance premium means that renters are covered for life events. So, if you end up experiencing a life-changing event that causes your income to drop by 25%, the DepositFree™ insurance will cover you for all reasonable claims without seeking recovery for up to 8 weeks. It's an excellent safety buffer for the unexpected.
2.Pay fewer fees upfront: As tenants generally pay 10% of 8 weeks rent to secure a home, there's less to pay upfront than there would be with a traditional deposit. Therefore, there's no need to spend ages saving up for a deposit before moving in. So, this is a perfect way to move into a property if you have not got much money saved.
3. Rewards for good tenants: Well behaved tenants can reduce their deposit insurance premium if they complete the following;
- Tenants pay their rent and bills on time.
- And track rental payments through the tenancy period.
Canopy will reward tenants by offering a lower premium on financial wellness products if you are renewing your lease on the same property or renting from a new property.
How much does the DepositFree™ policy cost?
There are a few costs associated with taking out a deposit free insurance policy, these include the following;
Cost of the insurance policy:
- 10% of the traditional cash deposit for a one-year lease.
- 15% of the traditional cash deposit for a two-year lease.
- 20% of the traditional cash deposit for a three-year lease.
Example: £3,000 deposit for a one-year lease. The insurance policy would only be 10% of £3,000 for a one-year lease, so you would only pay £300 (+admin fee and premium insurance tax).
Canopy Admin Fee:
- 10% of the cost of the insurance policy.
Premium Insurance Tax:
- 12% of the cost of the insurance policy (currently).
- Cancellation Costs: There are no cancellation costs if you cancel in the first 14-days following your purchase of a DepositFree™ policy.
- Renewing a lease: Renewing a lease is 10% of the initial policy premium paid.
Can you still get a DepositFree™ policy if there are multiple tenants?
Yes. If there are multiple tenants, the DepositFree™ policy fees are shared equally between all tenants. As a result, tenants are all equally responsible for damages and late rent.
What are the minimal requirements needed for a tenant applying for a DepositFree™ policy with Canopy?
As a minimum requirement, Canopy requires that you ensure you have the following before you apply;
- A reasonable credit score and record demonstrating your ability to use credit responsibly
- No County Court Judgements (CCJs) or bankruptcies in the previous five years
- You may also be asked to provide bank statements and any additional information about your previous credit history and rental history.
Is it okay if a flatmate leaves mid-tenancy?
Yes. You will have to agree to release your flatmate mid-tenancy with your Letting Agent or Landlord. The remaining tenants can either increase their policy cover for the remaining amount on the lease or replace their leaving tenant who can pick up their share of the policy.
Are Canopy Rentals safe?
Canopy is authorised and regulated by the Financial Conduct Authority.