You have a Rental Property – How do You Protect Yourself if Tenants Damage it?
When it comes to renting a property, the fear of damages that will burn a hole in your pocket is common. So, what can you do to protect yourself and your property from huge potential expense?
Rental Home Insurance
Before renting out your property, it’s important to be covered with rental home insurance (also referred to as insurance for landlords or landlord building insurance). Standard home insurance won’t cover properties that are not occupied by its owner, however rental home insurance will be able to protect the owner from legal liabilities that may occur while renting out to tenants.
Landlord building insurance protects owners from fires, floods, wind, hail, lightning, or other natural hazards that cause damage to the physical structure of the building – this can also include damage to other structures such as garages, decks, or fences. While these damages are not caused by tenants, it will add a layer of protection and will help owners avoid expensive repairs or replacement costs against damages that can’t be controlled. These policies will also include liability insurance to assist owners in the event that something from the rented property damages another property or causes bodily injury to a person.
If accidental damages occur to the unit/property from negligence or just simply by accident, those can be covered by rental insurance policies and leave the tenant at fault. If there is a broken handrail on the property, from normal wear and tear, this may not be covered by policies – if injury is caused insurance policies can protect the landlord from high medical and legal costs.
Theft of landlord belongings, such as tools to do maintenance work on the land, are protected through insurance for landlords however, equipment breakdowns, maintenance issues or the tenants’ personal belongings are not covered.
Although not required, it’s highly suggested that tenants obtain tenant insurance. Tenant insurance helps a renter pay for damage to personal property and also includes liability insurance in the event someone is harmed, through negligence or accident, at your rental unit. Requiring tenants to have tenant insurance can act as an extra shield and assist owners (and tenants) financially when it comes to accidental damages.
Normal wear and tear are not covered by these insurance policies and fall under the category of regular maintenance. Intentional damage that is caused by tenants can be worked through with an insurance agent but may be included in add-on coverages of vandalism. A landlord may be entitled to compensation during maintenance periods if a property has too much damage to lease while updates are being made.
At the end of the day, thorough screening processes and collecting a security deposit may be able to protect you and your property from wild tenants, but landlord building insurance is the safest way to shield your property (and your bank account) from events you cannot control. Talk to the friendly team at All-Risks Insurance Brokers Danforth to be sure you are protected today!