Do you need property insurance, even if you’re just renting?

5th Avenue
12 Apr 2022

Do you need property insurance, even if you’re just renting?

Property insurance is a personal matter that a lot of tenants either choose to have or don’t have.

In most leases, the landlord will always insure the structure of the property, and the tenant will be responsible to insure the contents of the property within the area that is being leased. Often landlords insist on seeing the insurance policy for the contents of the property in order to ensure there are no complications if the property gets damaged, and a claim is required.

Often a tenant who has not insured his contents would try to get the landlord’s insurer to pay for his loss.

It is always advisable to have insurance for the contents of an office or warehouse as often the contents of a property can be very valuable and hence very expensive to replace if there is damage to the office or warehouse.

Generally speaking, landlords will always insure the property. In the case of a triple net lease, the tenant is required to insure the property at the full replacement value on behalf of the landlord. Often in this case the landlord would get the quote and the tenant would end up paying for the insurance.

The tenant can elect to do his own insurance for the property, but the landlord needs to agree that should anything happen, he is happy with the replacement value and insurance is taken out. These kind of insurance policies are generally done on a standalone property and the tenant has the flexibility of then being able to run his expenses.

It is very hard to do this on multi-tenanted properties as there are different values for different properties, especially with the contents of each said property.

When you do insure your property when renting, either office or warehouse space, the insurer will often request that you have an alarm system linked to the property and furthermore linked to a response team who can react to an alarm being activated at your property.

Often it is the case that when people do try to claim for damage or theft, they do not have an alarm system in place. The insurer then has grounds to investigate the claim before paying out the replacement of the items. This can be a lengthy process that companies often cannot afford.

The same applies to a property that is insured with no fire protection in the property. When the property is damaged in a fire, the insurance company will often not replace the damaged items as there was no fire detection within the property. Made sure the landlord has covered the fire requirements as to the required specification for that property.

So do you need property insurance, even if you’re just renting? I think yes!

Gordon is the Industrial Director of 5th Avenue Properties with over 20 years’ experience in the Industrial leasing market. Get in touch with him for all your industrial leasing needs.

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