5 Ways Tenant Insurance Can Mitigate Your Risks as a Landlord
If we ask both parties, landlords, and renters, for an opinion regarding the other side, they will have bad and good things to say, and most of those things come from experience with previous tenants/landlords. It can be challenging to predict what would the future bring and whether everything will be ok when you don’t know what you can expect from the other person, regardless of whether it is a tenant or landlord.
That is why agreements and legally binding papers exist in the first place-to grant security for both parties. For landlords, it means that they will get their payments on time and that their property will be intact when the tenants decide to move. As for tenants, it grants security and peace and quiet, meaning that unannounced visits by the landlord cannot happen. Of course, this is just one example of how it all works and why creating an agreement is a must in this type of situation, as it all comes down to having certain rights.
On the other hand, what most tenants often forget about in all that hurry to move is to get a tenant insurance policy, which is something that you, as a landlord, should always insist on. It grants that in case of any damage to the property, the insurance will cover it, and for tenants, it grants compensation in case of any bodily injury. Of course, these are just the basics, and there are many other reasons why getting this insurance is a must, and you can find all about that if you keep reading or by checking this guide.
1. Helps with expenses when it comes to property damage
As you are already aware, insurance is all about coverage, and even with this type of insurance, the variety of what can be covered can be huge. Namely, the best way to be sure that in any case of damage, both intentional and unintentional, you, as a landlord, will not have to pay for repairs is by adding this into your tenant insurance coverage. Most of these policies have this risk included, but always check twice for this type of coverage.
Accidents happen, and it is impossible to predict them, which means that we need to be prepared all the time. Sometimes an accident can cause damage to a tenant’s property, and if it is not their fault, a landlord needs to be prepared to help them cover the loss. The accidents can be various, and if the tenant’s property is damaged, it is most likely that a classic insurance policy will not cover them.
Sometimes it can be fire, sometimes robbery, but no matter what, owners need to make sure that their renters are fully protected. If renters do not have other options to cover their loss, they will come after the landlord, which can cost a lot of money and nerves, so asking for renters insurance is one of the best ways to prevent it in time. In that way, a landlord can be focused on other things instead of worrying about something that could not be predicted.
2. They are affordable
We often say that something is not worth the money, but in this case, it is the opposite, as tenant insurances are more than worth it. Namely, it protects your property from many things, but what’s even better is that they are not that expensive. Depending on where you live, insurance companies provide you with the opportunity to pay for the insurance in equal monthly installments. Of course, since the price of this insurance is not that high, most people opt to go with the option to pay everything at once. Yes, the coverage has a huge role in how costly it will be, but the basic type of tenant insurance is usually between 10 and 20 dollars per month. It really is a small price to pay when you consider all you get for it.
3. It gives you the option to be pet-friendly
No matter how much you love animals, it is not always easy to be pet-friendly as a landlord, and the noise, fur, or feathers are not the main problems. Sometimes the dog can be overprotective and bite someone, a cat can scratch, and any other animal can hurt someone on purpose or by accident. In that situation, the person can file a lawsuit, which can cost a lot. Besides that, the animal can cause damage to someone’s property, which can also cause many problems with costs. Luckily, tenant insurance can mitigate these costs, so there is no need not to be a pet-friendly landlord, especially if you love animals. Keep in mind that, in most situations, anything bad that happens is mainly the landlord’s responsibility, the one who owns a certain residence, and having this policy, can improve the quality of your sleep.
4. It can help you choose the best tenants
Being a landlord is not easy because it can be pretty challenging to find the best people to let them live on your property. Many of them can cause problems or not pay rent and bills in time and force the landlord to search for others. If you decide to ask them for tenant insurance, it can make things much clearer and help you make a good decision as it can be a great indicator of their paying history. Persons who are ready to pay the insurance regularly will most likely be responsible when they need to pay for rent, so they should be the best choice. It’s about creating a bond of trust between two parties, and with tenant insurance, the landlord gets proof that its tenants are responsible. On the other hand, it also provides much better protection of renters’ belongings, meaning that in case of any theft, water damage, and even injuries, renters will get compensated.
5. Mitigate relocation costs
It is a legal responsibility in some countries to help renters with their relocation costs if they need to leave their homes because of natural disasters or fire, and we don’t need to mention that this can be costly. Of course, the whole idea is to provide security to every citizen that in case of any disaster, getting back to their feet is much easier. Furthermore, even if it is not a legal responsibility, many landlords feel a moral obligation to help them. That means you need to help them and try to fix the damage on your own property, which can be pretty expensive. If they own a tenant insurance policy, it will cover the relocation costs and costs for temporary housing, so both of you can try to solve problems without thinking about money. This represents a great way to accommodate your tenants in times of crisis and need with a temporary place they will live in while the property gets fixed.
