Tenants don't always treat your rental property as if it was their own home. When does their damage rise to a level that justifies making a homeowners' insurance claim?

The relationship between a landlord and tenant can range anywhere from very good, to a passive business relationship, to outright contentious. If a tenant doesn't respect the landlord's property, or a contentious relationship manifests itself physically and revenge turns into property damage, you might have grounds to make an insurance claim for that damage, and possibly even loss of use if the property is uninhabitable because of the damage and you’ve lost rental income.

An experienced local public adjuster can review your insurance policy and compare it to the specific situation you might find yourself in. VIP Adjusting's public adjusters are based in Port St Lucie, and handle property insurance claims throughout Florida's Treasure Coast, including claims for damage to rental properties.

What do Landlord Insurance Policies Cover for Rental Properties?

Homeowners insurance for rental properties in Florida are relatively similar to homeowners insurance policies for owner occupied dwellings. They require disclosure of occupancy as a rental property, though you'll find the major difference in coverage for contents. 

The dwelling/building coverages are almost identical. A standard homeowners insurance policy for an owner occupied dwelling is an HO-3 or "all risk" policy, which means the policy covers all direct physical loss, and then limits coverage from there. The corresponding policy for landlords insuring rental properties is a DP-3 policy, or "Dwelling Policy" form 3. It shares the language for the dwelling with an HO-3 and is also an all-risk policy. 

A DP-3 policy for landlords may have limited, or no coverage for personal property or contents. This is important to discuss with your insurance agent in advance so that you aren't renting a furnished property without the proper coverage. Many landlord policies do cover landlord's furnishings. Again, this an issue you should check with your insurance agent or insurance broker on before you find yourself with property damage and having to make a claim.

There is also a less popular, and lesser quality policy for landlords, a DP-1 policy. It's cheaper and that gets some people to fall for the trap, because it really is an inferior policy that only covers a list of what are referred to as "named perils."

For purposes of the information in this post, we'll assume a landlord has the more common DP-3 all risk policy.

Wear and tear, and age related factors are not covered under landlord policies

Insurance policies have specific exclusions for wear and tear and other age related factors, because homeowners insurance is meant to cover direct physical loss and accidental damage to property. Insurance is not meant to upgrade or remodel your home, or to take care of overdue maintenance. If the carpets are getting old, that's not something your insurance policy is meant to pay to replace.

Likewise, what's sometimes referred to as "hard living" is not covered by property insurance. Anything that would normally be considered something that would be covered by the security deposit (although the security deposit would also apply to items beyond this type of damage, including your deductible if you need to make a claim) is typically not covered by your insurance policy.  Worn and stained cabinets wouldn't be covered by your insurance, or scuffs on tiles, excessive cleaning, worn paint or dirty walls. These types of things might be the tenant's responsibility, but likely not your insurance company.

What would a landlord's insurance policy cover then?

We've handled a number of claims for damages caused by tenants to a landlord's rental property. The two most common scenarios for these are damages caused by parties or party related activities, and angry tenants who have had a dispute with the landlord or been evicted, and before leaving the property have attempted some kind of revenge.

Some of the damages we've seen related to the type from parties or partying would be sizable holes in walls, cigarette burns to carpets (and sometimes fire or smoke damage if that isn't noticed right away), broken tiles from dropped objects, and, believe it or not, we've seen damaged roofs, decks, and patios from shenanigans related to pool parties. 

Sometimes the landlord tenant relationship can become incredibly vindictive and the tenant, in possession of the property may seek their metaphorical pound of flesh. Claims VIP Adjusting's public adjusters have handled from tenant damage have included smashed and broken tiles, stolen appliances, ripped screens and broken windows, holes in drywall and plaster, broken pipes (and related leaks), and damaged AC units are the most common. We've also seen a number of bullet holes. 

We have also handled a large commercial tenant vandalism claim over space related to a supermarket where the former tenant, after obtaining a new location and in order to protect their own business from a competitor went through the building destroying fixtures and utility hook ups, flushed concrete down the building's toilets, stole the air conditioning units on the roof, and poked holes in the roofing membrane. 

Loss of Use and Additional Living Expenses

If a building has sustained significant enough damage that it's no longer habitable, your policy may cover lost income from the inability to rent (or in a commercial policy, business interruption coverage), but only if certain conditions are met and only for certain time periods. This is one of the reasons assistance from an experienced public adjuster can be the difference in your claim. Lost rental income can exceed the damages to the property and can quickly become the driving point of a claim, putting your investment in the property itself at risk.

If you've found yourself in a situation where your former tenant has caused damage to your rental property, call or contact VIP Adjusting today for a free claim review. 

You might also be interested in:

More info about the background of VIP Adjusting’s public adjusters