What if My Boise Tenants Can’t Afford the Catastrophic Damages They Caused?

Any catastrophic damages Boise rental property incurs is the responsibility of the tenant, when the tenant is the cause of the damage. For example, if a fire starts in the kitchen because the tenant forgot to turn off the stove, the tenant will be required to pay for the damage that fire caused your property. However, if the repairs cost thousands of dollars, you might be worried that your tenant cannot afford to pay that.

Liability Insurance

Your lease should require tenants to have a renter’s insurance policy or something that provides coverage for liability. Ask for at least $100,000 in coverage. When you’re going over the lease with your tenants, make sure they understand the requirements and ask them to initial the part of the lease that talks about liability. In the Boise area, we believe half of all tenants carry liability insurance and it’s important that you require it in your property so that all parties are protected.

Enforcing the Lease

Requiring insurance is one thing, but enforcing it is another. You can use a third party to provide insurance to the tenants and cover catastrophes such as fire, floods, smoke damage, explosions and sewer backups. Talk to a company such as Renters Legal Liability Insurance if you are interested in having them underwrite a plan to cover your tenants for liability. These policies usually don’t cost very much. You can even pay for the policy yourself and then include the cost in your tenant’s rent. This is an efficient way to enforce the liability clause of your lease, but you’ll also have to be careful about tracking the expenses and documenting what you pay the company and what you charge the tenant.

Proof of Insurance

If you’d rather keep the responsibility on the tenant, you can require proof of insurance before the tenant moves in. You won’t have to worry about extra bookkeeping and you’ll have access to the policy number so you can verify its limits and coverage amounts. Be sure to get proof of insurance when the policy is scheduled for renewal and stay proactive in ensuring it doesn’t get canceled or rescinded.

A good way to keep yourself in the loop is to require a proof of insurance as well as your name added as an interested party. When you are listed as an interested party, you’ll hear from the insurance company if there are any changes to the policy or it expires. Getting that information automatically can help you keep track of your tenant’s liability coverage.

Contact Greater Boise Property Management if you have any questions about how to ensure your tenants are financially prepared to pay for catastrophic damage they caused.

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