In today’s world, it’s difficult to determine how a tenant relationship may (or may not) work out. For example, while a potential tenant may look great “on paper,” and check out just fine with regard to income and credit score, it’s still possible that they may end up causing some major damage to your investment property. So, if or when that occurs, what type of coverage – if any – do you have?

Unfortunately, standard home owner’s insurance policies will not typically cover damages that are inflicted by a tenant. However, you could still be able to obtain coverage for these types of incidents.

Here, under a dwelling fire policy, “normal wear and tear” isn’t covered. However, preempted vandalism is. There is a caveat here, though, and that is that in order to file a claim due to vandalism, it is up to the home owner to file a police report, and to also press charges against the tenant / offender.

In cases such as this, it can still be somewhat tricky to actually collect. One reason for this is because the home owner is required to show proof of the vandalism – and this is not always possible to do. There is a possible alternative, though, and that is to sue the tenant for the damages in small claims court.

Insurance policies are all different, and all typically come along with a plethora of “fine print.” So, if you want to ensure that potential tenant damages are covered, be sure to read your policy carefully sooner rather than later. It can also be helpful to carefully screen tenants before allowing them to move into your property.

The many duties of “landlording” can be extremely time consuming. If you’ve found that you would rather hand off these duties to someone else – yet still earn income from your real estate investments – then it might be time to consider hiring a property manager. Give us a call to find out more about working with a property management team, and the many benefits doing so can offer.