Today there are about 44 million renters nationwide. If you’re one of the many property owners currently renting out your home, condo, or apartment building, you probably know that you should get homeowners insurance to protect your property.
But . . . Did you know that homeowners insurance covers renters’ damages? The answer is: not likely.
Homeowners insurance is designed to protect owners.
Although policies vary, homeowners insurance is designed to protect an owner’s building, complex, and other structures (e.g., garage) as well as side walls, floors, and ceilings. in the rental property from damage caused by perils, such as:
- Storms (e.g. wind, hail, snow)
Homeowners insurance may also pay owners for:
- Property damage to personal items left on the premises, such as: lawn mowers, snow blowers, furniture, etc.
- Lost or interrupted rental incomesay, if a unit becomes uninhabitable and you cannot rent it until it is repaired.
- Possible lawsuits if someone sues when they are injured on your property.
- device problem insurance, but only one if you’ve added this particular option to your policy.
Homeowner’s insurance does not cover damage to a tenant’s belongings.
So, if a tenant’s TV is stolen or their computer breaks down when a broken pipe in the ceiling spills into the living room, homeowners’ insurance won’t pay to replace those items.
Wait, there’s more.
Homeowner’s insurance does not cover damage caused by a tenant.
That is whether it was done intentionally (e.g., punching a hole in the wall) or due to normal use or wear and tear (e.g. a frayed carpet). And if your tenant accidentally brings home bed bugs, or causes other infections due to dirty or irresponsible living habits, your landlord’s insurance will not cover the cost of removing them. (But you can calculate the cost of extermination by taking it out of the tenant’s deposit.)
Homeowner’s insurance may cover accidents.
Some landlord’s insurance policies may cover unintentional damage caused by your tenants — including accidental fires — but if your tenants steal something, If something is in your possession or destroys your property, homeowners insurance usually doesn’t cover the cost of replacing or repairing those things.
What can you do
The good news is that while homeowners’ insurance won’t cover most tenants’ damages, you can do two things to add an extra layer of protection. First, ask the tenant to pay a deposit before they sign a lease with you. And, second, ask them to show proof of renter’s insurance. In addition to protecting your property with homeowners insurance, both of these steps can give you extra peace of mind in the event something unexpected happens.
