08 Jan Denver Property Management – Tenant Liability Insurance
Liability insurance provides protection from claims arising from injuries or damage to other people or property. As a landlord of a Denver rental property, you may find yourself ultimately responsible for injuries that occur on your rental property even if the tenant is the cause of the accident. For example, if your tenant fails to shovel snow from the sidewalk in front of your Denver rental property and someone slips, falls, and gets injured, guess who’s paying for it? You are (or your homeowners insurance is after you pay the deductible.) Say the tenant is cooking in the kitchen and catches the house on fire causing $70,000 in damages. You will have to file a claim against your homeowner insurance to cover it, fight with adjusters, and pay a lofty deductible.
In both examples above, the tenant was the cause of the accident. But if someone gets hurt on your property, the injured party and their attorney is going to sue whomever they think has the deepest pockets. If you have homeowners insurance and the tenant has no insurance or assets, they’re coming after you. This is why it is important for Denver Property Managers to require tenants to carry liability insurance in the amount of at least $100,000. When the tenant is at fault in an accidental injury occurring at your rental property and the injured party knows the tenant has liability insurance, they will try to collect damages from the tenant’s insurance company. Or if the tenant accidentally misses the brake while pulling into the garage and drives the car into the living room, their liability insurance will cover the damages instead of the landlord having to file a claim on their homeowners insurance.
The easiest way for a tenant to get liability insurance is to obtain a simple renters insurance policy. Most renters’ insurance policies come standard with $100,000 in liability protection in addition to insuring the tenant’s personal belongings in a catastrophic event such as a fire or flood. No tenant should be without renter’s insurance, but by requiring it, the landlord ensures that there is proper liability insurance in place.
Denver Property Managers should implement the following:
- Have a lease addendum that thoroughly documents the requirement for the tenant to carry liability insurance and states the minimum amount of coverage
- Require all adults occupying the property to be named on the insurance policy or obtain separate policies each
- Require tenants to provide proof of insurance
- Verify that insurance is renewed upon the expiration date listed on the proof of insurance
By requiring your tenants to carry liability insurance, you protect yourself as a Denver landlord and reduce your liability exposure for events outside of your control.
