By Robert Griswold
Question: I am a new landlord. Does the standard renters' insurance policy cover the landlord for physical damage to the rental property made by the tenant during his/her tenancy?
Property Manager Griswold replies:
The tenant's security deposit is the primary source for funds to address any needed repairs caused by tenant damage, not the renters' insurance policy carried by the tenant. The problem with standard tenant insurance policies is that there is no standard renters' or tenants' policy. They are all different. The tenant will get the specific coverage specified and paid for. Policies begin at the low end with basic actual cash value personal property damage with large deductibles and minimum liability protection. They can range up to more complete coverage with replacement value reimbursement on personal property along with more comprehensive liability protection.
If the landlord wants the renters' insurance policy to cover damages to the structure caused by the tenant, then that coverage would have to be specified when the tenant purchases the policy. The tenant will need to go over the specific coverage desired on any renters policy before it is purchased. Of course, the tenant is not likely to want to pay for additional coverage that is really the responsibility of the owner. Typically, coverage, if any, for the actual physical structure, is included in rental property owner's policy. However, even your rental owner's policy is not going to cover routine tenant damage from wear and tear and normal usage. You may want to consult my book "Property Management for Dummies" for a thorough discussion of renters insurance, including how to require the tenant to provide this coverage before he/she moves in.
Landlords' attorney Smith replies:
All tenants are encouraged to obtain a renters insurance policy. However, these policies generally do not cover claims for ordinary tenant damage. Insurance coverage will, in most cases, depend on the nature and cause of the damage. Tenant negligence causing fire or other damage would usually trigger coverage. It should be remembered that, with or without insurance, tenants remain responsible for all negligently or intentionally inflicted damages to the rental property.
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