If I am a property owner and I have Rental Property Insurance, is it a good idea to also have my tenant secure Renters Insurance? The answer is most definitely yes. Here is why.
Just because you lease out your property, doesn't mean that you necessarily know the personal habits good or bad of your tenant. I know of many of situations where a tenant did not disclose potential exposures being brought into the home that they are leasing. One of the big ones pertains to animals or more importantly, dogs.
Animal liability is a huge concern for the owner of the property, in that, if the tenant gets sued, the owner can also be held responsible for his or her negligence. If you don't specifically have something in a lease that addresses a specific liability exposure, the owner can be held liable in the suit. In addition, just because you have something in a lease that says no animals allowed, you still may have to defend yourself in a potential lawsuit just to prove you are not negligent. Hire an attorney sometime and see how much it costs to prove your innocents.
Another exposure are trampolines. Most of the time this is not addressed in a standard lease. What if the tenant buys a trampoline and a bunch of neighborhood kids come over to play one day and someone gets hurt? Not only will the tenant have a potential lawsuit, but just like the above animal liability issue, the owner will as well.
So what do you do to protect yourself about these potential exposures? The easy answer is monitor your tenant for possible issues, but more importantly, make sure it is mandatory that you tenant secure a renter's policy and make sure animal liability is also included. Even if they currently do not own an animal make sure that this animal liability is included in the policy in case they obtain a dog after the lease is secured.
If your tenant has a Renters Insurance policy, they will be the first line of defense in a suit. Hopefully, their limits will be adequate to cover any potential issues so it doesn't then fall back to the owner. If someone has a minor injury, the tenant's policy should have adequate limits to cover all of the claim. Of course, if it is a huge claim, they could still try to sue the owner, however, hopefully it won't get to that point.
This is what your policy is designed to protect, the "what ifs" that occur in life. Unfortunately, some people view these claim events like hitting the lottery. Even if their child was at fault or the cause of their own injury, these lawsuits still take place as a good percentage of the time, the insurance carrier will determine how much it will cost to defend the suit and simply offer this amount in a settlement to avoid having to drag this out in a court of law.
For more information, contact the professionals at Southern Insurance Group at 352-243-9000.