Renter's insurance pay for tenant neglect/damage?

4 Replies

I'm working with some sellers who's house was damage by the previous tenants in multiple ways. The tenants ran their vehicle into the exterior wall causing significant damage. They also trashed and neglected the property resulting in thousands in damage. According to the sellers, the tenants auto insurance is paying for the damage to the exterior but they are waiting to find out if the tenants renters insurance will pay for other damage to the interior (mold, broken cabinets, trashed carpet, etc). My understanding of renters insurance is that it protects the landlord from damage and theft to the tenants property rather than protecting the landlord from damage to the property caused by the tenants (that is what security deposits are for). 

My question is, will renters insurance pay for the damage caused by the tenants, or are will the sellers have to come out of pocket for the repairs? If insurance pays for everything and they do the repairs then there is nothing really left for me to improve as an investors/flipper. If insurance does not pay for the damage then I may be able to help them by purchasing for cash and doing the repairs myself. Appreciate your feedback. 


Renters insurance won’t, but renters liability insurance will. We require our tenants to carry it, or we do it for them via what is known as forced insurance via our provider:

Pays to the property owner or manager (“Landlord”) for damage to the Landlord’s property arising from the perils of fire, smoke, explosion, water damage, backup or overflow of sewer, drain or sump, falling objects, riot, or civil commotion. As a condition of coverage, such damage must arise directly from the actions or inactions of the resident and such resident must be contractually and legally liable to the Landlord for such damages.See policy for full coveragedetails - $100,000 per occurrence - legal liability for damage to landlord’s property - Underwritten by Great American InsuranceGroup.

Thank you, Levi. I appreciate your feedback. 

@ Levi T. I can't seem to find that sort of policy on Great American website. Any leads?

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