Tenant insurance is a subject that has come under a lot of debate and even confusion among landlords and tenants alike. Many landlords feel that it is necessary to mandate tenant insurance in the rent contracts. This would make it necessary for people living on the property to take care of their own things. In many places, however, tenants do not insure their belongings and are under the impression that the insurance cover by the landlords is sufficient. If you are a landlord, you will have covered the building and the premises from damages, fixtures and plumbing will also be covered by your insurance, so getting tenants to cover their own belongings is a good move.
Can tenant insurance be made mandatory?
Yes, as the landlord and owner of the rental property, you are allowed to put the purchase of tenant insurance as a clause in the agreement. Tenant insurance normally covers all the things that tenants bring in and will take out of the house once they leave the property. In case of a fire or a robbery, the damages that are paid out by the insurance company on the landlord’s insurance policy will only cover the damages caused to the structure and building. The things inside the building, the furniture and other items that belong to the tenant will have to be covered separately.
What is the coverage?
All the personal property owned by your renters will be covered in a tenant insurance policy. Another add-on is the personal liability coverage that is part of the insurance plan that covers accidental damage to neighboring property and unintentional personal injury to a third party.
Tenant insurance is a wise expense and most policies are quite cheap, so put it on your contract and make sure your tenants get one.