Unlike your landlord insurance policy, which covers your rental house and property from damage or loss, renter’s insurance is a policy that your tenant will procure. Most renter’s insurance policies will cover loss or theft of a tenant’s personal property, aside from damage the tenant may cause to the property of others. A lot of renter’s insurance policies also cover the tenant and their guests in the event of accidental injuries that occur on the property and lost food, or even hotel stays if necessary.
You may think it won’t affect you should your tenant experience theft or loss of personal property. But it could turn into your struggle, and it can drain your resources, especially if your tenant decides to sue you because they can’t afford to replace the items. Or, should your tenant, their pet, or even one of their guests injures themselves or others, you could easily find yourself the subject of a personal injury lawsuit. Even if you are not legally liable for your tenant’s property or the injured person’s medical expenses, dealing with a lawsuit will be time-consuming and costly. Your safest option is to do what you can to prevent lawsuits from happening from the beginning.
Another typical issue that gives property investors hardships is a loss of rental income when tenants experience theft or property damage. In cases of major damage, the tenant may even need to move out of the property for a short time. At other times, renter’s insurance may help them stay in a hotel while dealing with property repairs.
Therefore, one of the sure things you can do for your sake and your tenant’s well-being is to require them to obtain and hold renter’s insurance while leasing your rental home. Don’t forget to include language in your lease documents that clearly outlines the insurance requirements and ensure that your tenant provides you with proof of coverage before signing the lease. In this way, even if they later allow the policy to lapse, you can then hold them responsible for violating the terms of your lease and take any steps needed.
Proficient real estate investors know that requiring renter’s insurance is an important part of your long-term sustainability. By making your tenant understand the value of acquiring renter’s insurance and making it a condition of their lease, you are not only protecting them but yourself and your investment property as well.
Would you like more information on renter’s insurance policies and requirements in your area? Contact Real Property Management Nampa at 208-960-0660 today!