THE REASONS
YOUR TENANT SHOULD HAVE
AN INSURANCE POLICY
© Copyright 2000-2011 Landlord.com
Have you ever had one of your tenants call you and say something like
this, "my tolilet overflowed and it wrecked $1,000 of my clothes, what are you going
to do about it?!" It is nothing short of astounding how little most people understand
of how things work. Many tenants, probably some of yours among them, believe that the
landlord has a duty to safeguard their personal property, and that if something happens,
the landlord is liable, and the landlord’s insurance will pay for the damage.
In all the states with which the writer is familiar, the opposite is
true. Provided common areas comply with the fire codes, other applicable building and
security codes are followed, and the landlord is not guilty of negligence, the landlord,
and his insurance, is not liable for the tenant’s loss in the event of catastrophe.
The better part of wisdom is to emphasize, at the point of signing the
rental agreement, that the tenant is fully responsible for his own possessions. Make it
clear that insurance is the tenant’s responsibility. With many tenants, insurance is
not an issue. Their personal belongings, as treasured as they may be to the tenants
personally, simply do not have the monetary value to justify an outlay for an insurance
premium. Some, however, would gladly pay a premium for protection of their personal
property, and if you inform them that such insurance is their responsibility and that it
is available, you will be doing them a major service.
Some landlords even offer referrals to companies which specialize in
writing renter’s insurance policies. You might take an hour one day to locate such a
company and obtain some of their brochures or business cards, so you can supply one to the
new tenant at the lease signing.
If you do so, however, be sure to disclaim any endorsement of the
company, and never, ever, put yourself in the position of receiving quid pro quo for the
referral. Although this sometimes happens, it is illegal, or, at best, unethical. Leave
yourself free honestly to say that you offer the information only because you think it is
a good idea, and that you make no profit if they buy a policy.
