If you are the owner or tenant of a rental home, the inevitable question arises: should insurance only be the responsibility of the property owner or should the tenant also be liable?

Everyone has probably heard stories from acquaintances or in the media about tenants who have never cleaned their rental home, in the worst cases have also made a fire on the balcony, allowed a pet to use one room as a toilet, or even smashed up the apartment. There have also been cases where the tenant has left the bath water running, which has also damaged the apartment of the downstairs neighbour. But what happens if thieves visit your apartment and take along your appliances and other valuables?

“In the above cases, the best protection is a combination of insurance contracts entered into by the landlord and the tenant, i.e. insurance should be the obligation of both parties, both of them have different liability and need for insurance,” said Dagmar Gilden, Home Insurance Product Manager at Seesam.

Protection of property is the owner’s obligation

According to the insurer, the owner can insure immovable property as well as the interior finishing of the home, built-in kitchen furniture, bathroom furniture, carpets, household appliances and other items used in the apartment.

“In addition, the landlord can also protect themselves against loss of rental income. The need to use this insurance cover comes into play in the event of major damage that interferes with daily life to the extent that the tenant cannot live in the rental property during the repair period and therefore cannot pay the rent. Such situations may occur, for example, in the event of extensive damage to the bathroom or kitchen,” explained Gilden.

Before renting out residential premises, the owner should also notify their insurer of the plan. Although risks are somewhat different for rental property than for owner-occupied property, the insurer says there is no need to fear a significant increase in the insurance premium. However, if the insurance contract does not state that the apartment is used as a rental property and the cover also includes damage caused intentionally, the insurance company may refuse to compensate for the damage if it has been caused by the tenant.

According to Gilden, malevolent tenants have extinguished a cigarette end on the windowsill, resulting in a hole melting on the surface, have broken furniture or have never cleaned during the entire rental period, due to which a mere cleaning agent is no longer sufficient.

“Fortunately, however, the majority of tenants also treat their rented residence as their own home, and we tend to solve the same problems with rented homes as with any other home. Water damage caused by an unattended tap left open or a leaking washing machine connection is certainly the most common. Fires, which start from unattended candles as well as careless smoking, are also to blame for the damage Damage to property, such as broken furniture or household appliances, is also common, as are thieves who break into your home and never leave empty-handed,” Gilden said, listing the losses associated with rented apartments.

Tenants should insure their personal property

Although it is not the tenant’s direct obligation to insure the apartment, it is still in their best interest to insure the personal belongings in the apartment – furniture, appliances and anything else that comes into the apartment when moving. Namely, the tenant's personal belongings are not covered by the owner’s insurance. For example, in the event of a fire or theft, the owner’s insurance will cover the restoration of the apartment, but not the tenant’s personal property.

“In relation to assessment of value of property, we urge both owners and tenants not to underestimate the value of their property. When it comes to compensation for damage, we quite often come across a situation where people have only thought about larger items such as TV sets and refrigerators, but have forgotten clothes, kitchen utensils, books, etc. In the event of a fire, all of these need to be replaced and the total cost of each small item will end up in quite a large figure, proving to be very costly. Works of art, antiques, rare collections or precious stones definitely need separate attention,” Gilden advised on how to assess the value of one’s property.

In addition to insuring personal property, it would also be wise for the tenant to have liability insurance. With this, the tenant insures themselves against any damage that their activities may cause to another apartment or to neighbours. For example, an unattended tap left open that causes water damage to a neighbour’s ceiling and also damages expensive furniture.

All in all, insuring a rental home should be in the best interest of both parties, as it is the only way to protect both of them and to keep the tenancy relationship more peaceful and avoid unexpected incidents leading to high additional costs.

Reminder to landlord

• Notify the insurer of renting out your property
• Protect yourself with an additional loss of rental income insurance
• Take natural wear and tear into account: everyday wear and tear is normal and not covered by insurance

Reminder to tenant

• Protect your personal property and insure your appliances, furniture and other property separately
• Take out liability insurance to protect yourself against unexpected emergencies, such as flooding or fire, which damage both the apartment and neighbouring apartments
• Assess the value of your property precisely. Take also smaller items such as clothes, kitchen utensils and books, into account