The biggest mistake landlords make
If you are a landlord, meaning you own rental or investment property, you are more than likely unaware of the biggest mistake you’re making at the time of lease.
This applies to whether you one 1 single-family rental property or 50 units.
Most experienced landlords have rental agreements or lease contracts in place. Most of these also require a tenant to carry renter’s insurance coverage.
The problem we see most landlords make is that they do not have a follow-up program that verifies coverage for their tenants either on an annual basis or by being notified directly by the insurance company if the policy cancels for any reason.
Landlords may ask for proof of coverage at the time of lease signing, but that doesn’t mean the tenants keeps that policy in place or lets the policy run out. If you do not have a requirement to get notified if the policy changes, you as a landlord can be setting yourself up for unnecessary liability.
Why should landlords care their tenants have renters insurance?
Most people believe that the importance of renter’s insurance is to cover the tenant’s personal property or contents.
Now, while that is true, it isn’t the only reason it is important.
Renter’s insurance policies also provide personal liability protection, which gives pays for bodily injury or property damage caused to others that you are legally liable for.
If a renter/tenant causes damage to your property through their negligence, their renter’s insurance policy could cover the damage.
Some examples of this, tenant leaves the sink running in the bathroom causing extensive water damage to your property and also the tenant that lives downstairs or if the tenant has a dog that bites someone on your property.
How landlords can solve this problem
It takes one simple step to protect yourself from being held completely responsible for the actions of your tenant. Not only do you require them to have renters insurance with a minimum of $300,000 in liability but you also ask to be listed as an additional interest on that renter’s policy.
By being listed as an additional interest, you will be notified directly from the insurance company if the policy is pending cancellation, does cancel, and is renewed.
It gives you a guarantee that, if a claim should arise due to the tenant’s negligence, you or your own insurance company have some recourse to go back after.
What can you do next?
We know babysitting tenants is the last thing landlords want to do. This simple adjustment to your lease requirement and your process can make a huge difference.
If you need help on this feel free to reach out to us by clicking the button below to talk to one of our trusted insurance advisors.