Is tenant insurance necessary?

[Rookie154]

Hi,

The insurance agent I am working with, states that the insurance company will not give me a policy (commercial) if the tenants do not have their own insurance. Do I have to force my existing tenants to get insurance, if they are reluctant or can`t afford it? Or is there a way around this?

Thanks

Rookie

 

[invst4profit]

What province are you in?
What type of commercial property do you have?
Why would you not want your tenants to carry there own insurance.
Does there lease agreement not require that they carry liability/content insurance?

Bottom line is your insurance company is not only protecting themselves but they are also protecting you. If your tenant causes damage and is not insured your insurer and therefor you will be liable. You will be on the hook for the deductible as well as higher rates in the future.

For your own sake you should find a way to make sure your tenants have there own insurance coverage.
If insurance coverage is part of there lease and they refuse to carry coverage - evict

 

[jwilbrin]

QUOTE (invst4profit @ Jun 23 2009, 10:11 AM) Bottom line is your insurance company is not only protecting themselves but they are also protecting you. If your tenant causes damage and is not insured your insurer and therefor you will be liable. You will be on the hook for the deductible as well as higher rates in the future.

For your own sake you should find a way to make sure your tenants have there own insurance coverage.
If insurance coverage is part of there lease and they refuse to carry coverage - evict


Listen to Greg. He has given you excellent advice.

It always amazes me how many landlords do not require tenants to have renters insurance. Insurance companies are getting tougher on rental properties and many do require that renters have their own insurance. You do not want higher rates as a result of a tenant causing damage to the property.

 

[Rookie154]

Thank you, you are both absolutely correct. However, when I rented out the rooms, I was just happy to have the place rented and so I did not make tenant insurance mandatory and so you see my dilemma. I know, I know, rookie mistake. So what now?

 

[invst4profit]

More information is required regarding the type of rental property you own.
Do your tenants have a lease agreement?
Again, what province are you in?

 

[Rookie154]

QUOTE (invst4profit @ Jun 24 2009, 09:27 AM) More information is required regarding the type of rental property you own.
Do your tenants have a lease agreement?
Again, what province are you in?


Hi,

My property is in Oshawa, Ontario. It is a duplex. I am however, renting rooms (3) in one unit, and have a family in the other unit. The rental agreement with all of the tenants is month to month, so no long term lease.

Thanks

 

[invst4profit]

Difficult situation as in Ontario tenants have more rights than LLs.
You could approach your tenants inquiring as to whether they already have content and liability insurance and if not inform them that your insurance carrier requires they carry personal coverage. Remind them that your insurance does not protect there personal property or liability.
As it is not a requirement of your lease you really have no recourse should they refuse.
Something to add to your lease for future tenants.