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CONDO RENTAL INSURANCE
Condo rental insurance can be applied in two directions to cover owners who choose to rent their condominium units to others for use a home. On the one hand it would be a condo rental insurance policy purchased by the person who makes his or her home in the condo. This would protect the renter against damage to or loss of personal property due standard perils which include water or steam damage from exploding plumbing, air conditioning or heating units, and would provide bodily injury liability coverage. The house renter would have to attach appropriate natural disaster riders to the standard form policy to cover flooding, earthquakes, and so on.
This form of condo rental insurance is the responsibility of the lessee, the person who rents the condominium or apartment, and it is the owner's responsibility to ensure that the renter produces evidence of insurance before signing the lease and taking possession of the unit. This will ensure that any damage caused by the leaseholder is covered, as would be any loss of property experienced by the leaseholder.
The other direction from which condo rental insurance might come would be if the property owner were to purchase landlords insurance against physical damage to the property. Typically, condominium associations purchase what are called master policies, which cover the larger structures of the buildings, that is, the floors, elevators, the roof, and other areas common to all owners of the units within the larger structure. The association might also choose to insure the insides of units except for the personal property of the owners and any improvements the individual owners might make. Such things as carpets, walls, and some fixtures would not be covered under this policy. Unit owners would purchase a specific condominium owners policy to insure their appliances, any improvements they might make inside the units, and, of course, all guests and visitors to their units.
The association could also choose another more inclusive master policy, which would insure everything in the building and in each individual unit, including personal property and improvements. The condominium master policy or the unit owners homeowners policy will provide coverage for the standard allowed perils such as damage from fire, theft, vandalism, aircraft, explosion of heating or air conditioning systems, and smoke. Naturally, there would be limits to this coverage, in which case, unit owners could purchase supplementary coverage if this were insufficient for their needs.
Whichever the type of master policy the condominium association selects, once a unit owner chooses to rent or lease the unit to another person, it would be necessary to protect the investment by taking out a condo rental insurance policy for that particular purpose.
Landlords or rented property coverage is the flip side of insurance purchased by the renter of a home. It would, ideally, include coverage for the landlord for the perils listed in a standard homeowners policy, but also for such things as natural disasters, accidental and malicious damage, legal protection, and a rent guarantee clause. The property owner who keeps a condo or townhouse as a rental property is holding an investment, and would purchase this very specific rental insurance to protect the condo from damage that might be caused by nature or by human beings. This extra expense however will be reflected in the policy premium.
Natural disasters are not covered in standard form homeowners' policies, and even if the renter had purchased condo rental insurance, it would be left to that person to decide whether indeed to actually make any repairs to a property of which he or she is not the owner but is occupying only temporarily. The renter could very well decide to relocate and not refurbish the rental property, quite properly considering that an investment explicitly for the homeowner.
Should the renter cause any damage to the unit that is not covered in either the renter's own policy or in the association's master policy, the property owner would have recourse to specific landlord's insurance, in this case, the condo rental insurance purchased for this purpose.
Personal Liability in a Rental Property
Personal liability coverage against bodily injury to a tenant or to a guest of the tenant is a matter for serious consideration for every owner who makes a rental property of a condo or loft. It could become an issue. If an accident occurred in which either the tenant or a guest or member of the tenant's household were injured, the tenant might find cause to place the liability upon the landlord. If the landlord had no condo rental insurance of his or her own, this could quite easily become a very serious financial matter.
Placing a condo as a rental property could be a very good investment for renters whether they are students, a senior citizen, or a young family. Owners ought to be aware, however, that renting a property also carries potential for liabilities and should purchase adequate landlords condo rental insurance to protect themselves.