Torn screens. Burned linoleum. Holes in the wall. Landlords see a lot of damage caused by tenants, and this can cost time and money to repair. Landlord insurance can cover tenant damage in some situations, but it depends on the cause and nature of the damage.
Property damage coverage is a key element of any landlord insurance package. This coverage can help pay for the costs to repair or replace the landlord’s property after a loss. However, a standard landlord insurance policy will only cover some damages.
What tenant damage is covered?
A landlord’s property insurance should cover many types of accidental damage caused by tenants. For instance, property insurance policies typically provide coverage for losses caused by fires, explosions, and falling objects. Certain types of water damage are also covered, such as damage from burst pipes.
As an example, if a tenant accidentally causes a kitchen fire, your policy should cover the damages. Likewise, if a tenant fails to take precautions to prevent frozen pipes during a winter freeze, the resulting damage should be covered.
See your policy for a list of covered perils. If your tenant accidentally causes a loss, and that loss is a covered peril under your policy, you should be able to file a claim.
What tenant damage is not covered?
Landlord insurance will not cover certain types of tenant damage. This usually includes damage from wear and tear. Since you can expect wear and tear damage to occur, property owners should budget for the associated costs. For example, landlords will need to clean, and possibly even replace, the carpets in a unit after a tenant moves out. Likewise, refrigerators, ovens, dishwashers, and other appliances have a limited lifespan, meaning you will need to replace these items eventually. A typical property insurance policy does not cover such losses.
Landlord policies also typically exclude intentional damage caused by tenants. Tenants who are unhappy with the landlord sometimes seek revenge by causing malicious damage. For example, a tenant who is being evicted may decide to break the windows, clog the toilets, or punch holes in the walls. Landlords may have some ways to recover costs when a tenant destroys rental property, but they will not usually receive coverage from their landlord policy.
Additionally, landlord insurance only covers the landlord’s property. This means that if a tenant accidentally causes a kitchen fire, the landlord’s insurance should cover the damage to the unit itself because the landlord owns the unit. However, the landlord’s insurance policy will not cover any damage to the tenant’s personal belongings, such as the tenant’s furniture. Tenants should purchase their own renter's insurance to secure coverage for damage to their own belongings.
What rights does a landlord have if the tenant intentionally destroyed the rental property?
If a tenant maliciously destroys property, the landlord probably won’t find coverage for the loss in their landlord insurance policy, but they may still be able to recover the costs.
Since state law typically allows landlords to deduct repair costs for tenant damage from the security deposit, this will be the first method for recovering expenses in most cases. However, in cases of severe damage, the repair costs may be greater than the security deposit. In this situation, the landlord may opt to file a lawsuit against the tenant for the rest of the damages.
Regardless of the route you take, it’s important to document the damage as thoroughly as possible. If the damage is ongoing, you may need to involve the police to prevent further damage. If you are not already in the process of evicting the tenant, malicious damage will likely be a cause for eviction. See your lease and your state’s landlord-tenant laws to ensure you are in compliance.
What responsibilities does the tenant have?
State law varies, but, in general, tenants should take responsibility for keeping the unit in good condition and reporting issues promptly. Landlords can outline the tenant’s responsibilities in the lease. For example, the lease may state that tenants must report damage in a timely fashion and it may provide instructions on how the tenant should make the report.
The lease may also state that the tenant is responsible for keeping the unit clean and free of pests. Many landlords include a mold addendum that outlines the tenant’s responsibilities for preventing and reporting mold.
Who is responsible for covering vandalism costs – the landlord or the tenant?
As the property owner or manager, the landlord is typically responsible for covering damage caused by vandalism.
Landlord insurance often excludes malicious damage caused by tenants, but it can provide coverage for vandalism caused by third parties. This is because many commercial property insurance policies include coverage for vandalism, riot, and civil commotion. However, landlord insurance will not typically provide coverage for vandalism to the tenant’s personal property. As with other types of damage, the tenant will need renters insurance to receive this coverage.
Protect your property from damage
Having coverage for damage is important, but preventing damage is better. There are several precautions landlords can take to reduce the risk of losses.
- Educate yourself on your responsibilities and risks. New landlords can get started with these tips for first-time landlords.
- Create an effective and compliant tenant screening process.
- Use a maintenance checklist to keep your property in good condition.
- Consider security measures to discourage vandalism and other types of crime.