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Understanding the indemnity agreement

If Padder has to pay your landlord because you didn’t meet your lease obligations, you agree to pay Padder back.

Here’s what that means in real life.

What “indemnity” means in practice

In plain language, indemnity = a promise to repay or compensate for loss.

  • Padder’s policy protects your landlord.
  • If you honour your lease (pay rent, follow the rules, move out properly), the indemnity never comes into play.
  • If you default on your lease and Padder pays your landlord for a covered loss (like unpaid base rent or last month’s rent), the indemnity means you now owe that amount to Padder instead of your landlord.

It works similarly to how a traditional co-signer or guarantor works:

If someone steps in to pay your landlord because you didn’t, that person (or, in this case, Padder) has the right to ask you to pay them back.

When you’d be required to repay Padder

You are only required to repay Padder if both of these things are true:

  1. You’ve defaulted on your lease (for example, not paying base rent, breaking the lease early without paying what you owe, failing to pay your last month’s rent), and
  2. Padder has paid your landlord under a valid claim on your policy.

If no claim is made and Padder never pays your landlord, you do not owe Padder anything beyond your one-time premium (subject to the terms and conditions of your policy).

No claim = no repayment.

How repayment plans work

If Padder does pay your landlord for a covered loss under your policy:

  1. Padder will contact you first to explain:
    1. What was paid to your landlord
    2. Why it was paid (what default it relates to)
    3. How much is now owed to Padder under your indemnity
  2. You’ll be given options to repay the amount owing, which may include:
    1. Lump-sum repayment, if you’re able, or
    2. A structured repayment plan, with instalments designed to be fair and realistic based on your situation.

Padder’s goal is to recover what was paid out on your behalf in a way that’s manageable and transparent.

What happens if you ignore communication

Avoiding communication doesn’t make the debt disappear—it just makes things harder.

If you ignore communication from Padder after a claim has been paid:

  • Padder will make multiple attempts to reach you (email, phone, written communication).
  • If there’s still no response or cooperation, Padder may:
    • Escalate the matter to collections, and/or
    • Take further steps permitted under the indemnity and applicable law.