When managing or owning a rental property, two things should come to the top of your priority list. One, maximizing the long-term potential of the investment, and two, minimizing the overall liability/risk associated with it. Today this article is intended to help you minimize the risk associated with rental property.
What is Tenant Liability Insurance?
TLI or Tenant Liability Insurance is insurance that protects the landlord and the tenant in the event of tenant negligence. Imagine your tenant deciding to place their bbq grill in the living room to cook dinner because it’s snowing outside. The home catches fire, and the tenant is now out of a place to live and you have just lost your investment. This is when Tenant Liability Insurance comes into place.
What does Tenant Liability Insurance cover?
Losses, which may include fire, explosions, burst water pipes, storms, theft, and overflow of a sewer or drain, even riot or commotion, simple negligence that can get out of hand, are inevitable. These can turn into a headache when dealing with maintenance and other various legal liabilities. That is the reason why Tenant Liability Insurance or TLI is a requirement for every lease application with HomeVault Property Management. Both owners and tenants simply enjoy the benefits of this program because it offers them protection. Let’s have a look at this example:
“During one of our routine inspections, we discovered that a bathroom shower surround had been leaking behind the tiles. On the surface, it looked like several tiles had become loose but when a maintenance professional examined the surround they discovered that it was much worse than expected. Mildew and rotten sheetrock to almost the entire surround. This is a classic case of what we classify as “unreported maintenance.” The great part here is that the tenant had TLI, and the damage that was caused based on negligence was covered under the policy.”
Another example of how TLI can be a huge saving to the owner and tenant alike is a case of flooding we had recently.
“In the middle of the night, one of our tenants got up from bed to use the restroom. After completion, he didn’t realize that he had clogged the toilet and went straight to bed and fell back asleep. When he woke up the next morning, he placed his feet on the carpet to discover the toilet had been running over since he had last used it. He immediately reported the flood and remediation took place. After carpet extraction and baseboard repair, a $4,000 damage invoice was issued. The clog was not the fault of the toilet or the plumbing but was caused by the t