Most landlords wisely carry a landlord insurance policy. This policy covers landlords in the event of a lawsuit as well as the building being rented. However, that policy will not cover the contents within the property. Most tenants expect to carry a renters insurance policy. Others would rather not belabor the costs of this policy and really don't understand the value of such protection.
The team at Innovative Property Solutions requires all tenants to obtain a renters insurance policy and provide proof of coverage on the day of lease signing. Here's why:
Personal property coverage, for example, protects the tenant's belongings in the event of a fire, flood or alternate disaster. As a landlord, you should be aware that this policy will not guard against theft or damages incurred due to landlord negligence.
Liability Coverage is what will provide the most protection for you as a landlord. This policy protects your neighbors in the event that they experience personal property damage at the hands of your tenant or a natural disaster. This also protects the tenant in the event that your neighbor decides to sue he or she directly. If someone who is visiting your property is injured because of your tenant, liability will protect you in that event as well.
Renters insurance is most helpful in covering hotel stays for your tenant in the event of necessary repairs requiring your tenant to evacuate. This is a draw for premium tenants who know they will be protected no matter what happens. It's almost a guarantee that they will want to continue to live in your rental unit knowing they will always have a roof over their heads no matter what happens. In the event of a tenant imposed fire, renters insurance picks up the tab for the items that would normally require out-of-pocket payment, once again protecting both landlord and tenant alike.
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If you do not have a property management team working to protect you in all aspects of the business, be sure to research local laws regarding renters insurance requirements in your zip code. In addition, review the terms of your lease agreement and be sure to include a clause requiring renters insurance.