Is Renter’s Insurance Able to Cover Damage to a Landlord's Property?

Whether you're a landlord or a tenant, it's essential to understand what a renter's insurance covers. Read on to learn what is not included in this type of policy.

If you're a landlord or considering becoming one, you likely know that finding the right tenants for your property can make all the difference. 

Of course, every property owner hopes to find renters who pay on time and respect your space. But sometimes damages to your building happen, whether by accident or through negligence. For this reason, you need to be aware of the potential damage your property might experience from your tenants and whose responsibility it is to pay for them.

Property damage can happen at any time. For example:

• Tenants may accidentally start a fire by leaving the stove element on and getting caught up in their favorite book.
• Your renters may cause damage to your property with their furniture as they're moving in or out of your unit.
• A thief may force entry into your rental property by breaking a window or door while your tenant is at work or out of town.

Even if you rent to someone you trust, it's smart to ensure that you are covered against any damage to your house, unit, or building. We'll look at how a renter's insurance policy protects landlord property.

Is Protection Provided to the Landlord by Renter's Insurance?

Many landlords require renter's insurance to protect their tenants. While renter's insurance isn't specifically for landlords, it can help you avoid any possible lawsuits.

Let's suppose the bathroom in one of your rental units starts leaking, causing damage to your tenant's belongings beyond repair. If they decide to sue you, it could lead to potentially disastrous results. In instances like this, the renter's insurance protects the landlord, allowing residents to claim their losses rather than taking you to court.

Who Is Responsible for Rental Property Damage?

Except for issues caused by a building's regular "wear and tear," tenants are usually responsible for any damage to a rental unit. They could also be held accountable for any destruction done to adjoining suites.

Tenant's insurance can cover any damages or loss and prevent residents from paying for these costs themselves. This type of coverage can also help protect landlords from having to pay out-of-pocket for costly repairs if a renter damages your property and cannot repay you for these expenses.

What Are the Overall Benefits of Tenant's Insurance?

The tenant's insurance covers many potential situations that would otherwise leave renters and landlords at risk. Of course, many of these policy benefits are directly for renters. 

Tenant's insurance policies typically include the following three types of coverage:

• Liability Insurance
• Additional Living Costs
• Contents Insurance

Below is an outline of how tenant insurance, including liability, additional living costs, and content coverage, can help protect renters.

Coverage of Damages to the Rental Property

When you're renting an apartment or house, you may be held responsible for any damages to the property. This may include paying for repairs or replacing expensive items.

With tenants' insurance, you are protected financially. Your policy can help you cover costs in an accident or if unexpected damages occur.

Coverage of Your Personal Belongings

Contents insurance covers the costs of replacing or repairing any personal belongings that you keep in your home. This type of coverage can help you replace or repair your things if they are lost due to theft, fire, etc.

Coverage of Accidents

Let's suppose you're renting a house and someone hurts themselves while visiting you on the rental property. Even if you're not at fault, your guest can sue you for damages or bring you to court for hospitalization costs and other charges. 

Liability insurance covers the costs of legal fees in case of a suit against you and the amount of damages for a successful lawsuit.

Coverage of Additional Living Costs

If the space you're renting becomes uninhabitable due to damage, an extensive home repair, or a remodel, additional living costs may cover many of the expenses associated with finding temporary housing.  

Many people find that a long-term hotel stay is not financially feasible, so this part of the tenant's coverage helps reduce those concerns and costs.

What Is the Cost of Renter's Insurance?

The cost of tenant's insurance can vary depending on which company you choose to purchase your coverage from. Premiums for renter's insurance can fluctuate based on many factors, including: 

• Where your rental property is located: Everything from your neighborhood, city, and province can contribute to the cost of your tenant's insurance.
• The amount of insurance you need: Your premium will fluctuate depending on how much coverage you'd like to have.
• Your insurance claims history: Your insurance provider will consider your claims background, for example, if you've had a canceled policy.
• Your rental property details: You'll be required to share when and how your property was built, which can affect the cost of your coverage.

Most insurance providers will consider an assortment of factors, such as those above, to determine your payments. This makes it difficult to suggest an average or standard cost for renter's insurance policies.

Whether you're a landlord looking for suitable tenants or a renter searching for your next great home, understand what your insurance policy does and does not cover.

You can take every precaution in finding the right tenant or space; however, accidents do happen. With renter's insurance, both landlords and tenants can mitigate their risks.

Help protect your finances with coverage that can help renters pay for damages to the unit, accidental injuries and liability claims, replacement of personal items, and additional living costs should the rental home become uninhabitable.