As a Lakeland real estate investor, you now can tell that renter’s insurance protects your tenants’ personal property from loss or theft. But did you also know that renter’s insurance can protect you and your property as well? There are countless excellent reasons why your tenants need renter’s insurance. But one of the best from an investor’s standpoint is that it protects you from liability for your tenant’s actions. It’s important to learn more about what renter’s insurance does and why you ought to require your tenants to have it.
As opposed to 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, as well as damage the tenant may cause to the property of others. Numerous 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 might think it won’t affect you should your tenant experience theft or loss of personal property. But then again, it may well become your problem, and an extremely expensive one at that, 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 injure themselves or others, you could easily find yourself the focus 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 most cost-useful option is to do what you can to prevent lawsuits from happening in the first place.
Another common challenge that property investors face is a loss of rental income when tenants experience theft or property damage. In cases of extensive damage, the tenant may even need to move out of the property for a short time. In such instances, renter’s insurance may help them stay in a hotel while dealing with property repairs.
For these reasons, one of the best 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. You should include language in your lease documents that clearly outlines the insurance requirements and ensure that your tenant gives you a proof of coverage before signing the lease. That 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 necessary.
Savvy real estate investors understand that requiring renter’s insurance is an important part of your long-term success. By helping your tenant understand the value of obtaining 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.
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