Is your property covered if a catastrophe happens? Hopefully, nothing will damage your home or rental property. But, you never know when the unexpected will occur. So, it is essential that you have a good rental insurance policy to ensure that you won’t be facing financial problems if something damages your home.
Rental Insurance: A Requirement in the Lease
As a landlord, you need to think about the coverage for your rental properties. Not only do you need to have the right insurance coverage for the property, but you should also require the renters to carry a rental insurance policy as well.
This requirement can be written into the lease, requiring that the renters carry an active policy while living in the property. If something happens, the insurance coverage could mean next month’s rent. It offers an extra layer of protection when you have other people renting the space.
Renter’s insurance is affordable; most of the time the monthly premium is less than $20 a month. When you are choosing potential renters, let them know that the policy is necessary if they want to rent the property. Refer them to talk to their existing auto insurance company to see if discounted rental insurance is available as well.
Why Your Renters Need Insurance
Adding this layer of protection helps you avoid a few potential problems of being a landlord. Here are the reasons why you need to require your tenants to carry a rental insurance policy.
- Avoid Legal Action: If damage happens to your renter’s belongings, then you might be facing a lawsuit to cover the costs. Avoid litigation by having an insurance policy that will pay for the damages if a natural disaster occurs.
- Reduce Liability: Did you know that you could be held liable for an injury on the property, even if you aren’t on-site when it occurs? For example, the renter could throw a party and have a guest injured on site. If that person doesn’t have health insurance coverage, then they might file a claim against the landlord. But, a renter’s insurance policy will cover the claim, helping to take the liability away from you.
- Manage Tenant Quality: It is a red flag if you have tenants who are complaining about carrying a rental insurance policy. When you are discussing the agreement, be cautious if the applicant says that they can’t afford the $20 monthly payment for an insurance policy.
- Temporary Home Coverage: Will you be responsible for finding a place for the renters to live if something damages the home? If a flood or fire make the property uninhabitable, then renter’s insurance will pay for the temporary housing.
Not only will you minimize your financial risk, but renter’s insurance also gives you the peace of mind to know that things are covered if something goes wrong.
Do you need more information about buying an investment property? Our team at DUFFY Realty is here to help! Contact us any time for the best real estate services in Atlanta: (678) 318-1700