3 Scenarios For Landlords To Think About
Being a landlord can be a very stressful job. If property management isn’t your full-time job, or you are not working with one it can be even more stressful. Today, we want to discuss the various situations we often see with rental property owners and some of the pro's and cons of each.
There are three different scenarios that we as Insurance Agents tend to see with our rental property owners. Let’s take a look:
ONLY THE LANDLORD CARRIES INSURANCE FOR THE PROPERTY
This scenario can be very troublesome as it places a lot of risk on to the landlord. For example, if the tenant were to have something delivered to the apartment and the delivery person was injured due to negligence by the tenant. A real life scenario we've seen play out is a dog biting the hand of a tenants guest. The tenant had no insurance so the landlord's policy stepped up and paid for damages. It was great that there was coverage but now the landlord had a claim in his insurance history. If the tenant had obtained renter’s insurance the liability portion of their policy would have covered the damages instead of the landlords.
LANDLORD & TENANT CARRIES INSURANCE
This scenario offers better protection to not only the tenant but also to the landlord as we previously discussed above. Both parties will now have an insurance policy in place to step up and help fight for them in the event something unexpected happen. Here are some highlights.
Coverage for the tenant:
-
- Personal Property (Furniture, Clothes, Electronics etc)
- Liability
- Loss of use (Provides a place to stay in the event of a covered claim)
- Everything else that comes on a standard renters policy
- The Landlord will also have protection for their:
- Building
- Liability
- Loss of rent in the event of a covered claim
- Plenty more!
For more on this example check out our Coffee with Kody episode here: https://youtu.be/AuGN1OeVXik
- The downside to this scenario is that it does leave some responsibility to the landlord. They will be responsible for the maintenance and upkeep of the property. If you are not handy or don't have a lot of time this can be a problem and you can still find yourself in a liability claim issue should you not take care of the property properly.
LANDLORD & TENANT HAVE INSURANCE AND THE LANDLORD HIRES A PROPERTY MANAGER
This is often the best case scenario that we see. In this scenario, the landlord hires a property manager to take care of his rentals. Now each party (Landlord & Tenant) has the protection they need and the upkeep of the rentals is being regularly completed by a qualified property maintenance company in a timely manner. As a landlord the company you select should be experienced and properly insured. Property maintenance companies can be a great resource for a landlord for things like: Upkeep, Repairs, Snow Removal, as well as finding & screening tenants. We recommend our rental property owners use them whenever they can.
Hopefully you picked up some tips on making sure your rental property is properly protected. As always, if you have any questions regarding policies, general insurance, need to play out various scenarios… call us! We love to answer question, especially before its too late and you need to submit a claim.