Renter’s insurance is becoming one of the hot issues today (no pun intended). As an owner, you only cover your building. The tenant’s possessions are not covered from a fire or any other damage. In the past, this issue was mostly about furniture and belongings.
It is now going well beyond that. Here are a couple examples: A tenant causes the fire – they are now liable for those damages. The owner’s insurance company will sue the tenant for the damage and if they don’t have renter’s insurance it can get ugly. A friend of the tenant gets injured on the property. The friend sues the owner but this is often an issue with the renter’s coverage. Insurance companies have gotten much more aggressive in going after the responsible party and they need to have coverage.
I recently had a tenant that caused a small fire. The fire was caused by a faulty electrical cord. The firemen broke several windows and cut a hole in the roof. The tenant called to see when the damages would be repaired. I had to tell them that they were responsible for the damage and would be charged for it. Not only did they lose possessions and occupancy time, they were now responsible for the repairs as well. Believe me, this is not a good situation to be in.
Do yourself a favor and enforce renter’s insurance.