As a landlord in the Charlotte area, you may wonder what are the best ways to insure your property. Besides your own insurance policy, should you require your tenant to hold a renters’ insurance? We think you definitely should. We have talked elsewhere about landlord policies, so let us discuss about the benefits of the renter’s insurance for your rental investment.
What is renters' insurance?
Renters' insurance provides coverage if the tenant’s personal belongings, - furniture, clothes, or electronics, for instance - , are damaged by dangers mentioned on the policy, such as fire, water, smoke, theft, or vandalism. It also provides the tenant with liability coverage if someone is hurt on the property, or if the tenant accidentally damages the property. The renters' insurance, however, does not cover the house structure, which is insured instead through a landlords’ policy.
Why is renter’s insurance so important for the landlord?
In case a person is hurt on the premises or the tenant damages the property, any claim will be placed first on the renters' insurance, and only after on the landlords’ policy. While asking tenants to hold a renters’ insurance is a must, it is rather hard to keep track of the tenant paying the policy. Ideally, you need to ask your tenant to provide a proof of contract before they move in. If you ask to be listed on the contract as an ‘interested party’, you will receive a notification when that policy lapses, and you can ask your tenant for a renewal.
At Smart Shield Property Management, we offfer landlords an Asset Protection Plan that covers up to $100,000 liability and which is paid by the tenant as part of the monthly rent. In addition to that, we advise our tenants to acquire a renters’ policy to insure their own belongings.