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Have you ever had one of your tenants call you and say something like this, "my tolilet overflowed and it wrecked $1,000 of my clothes, what are you going to do about it?!" It is nothing short of astounding how little most people understand of how things work. Many tenants, probably some of yours among them, believe that the landlord has a duty to safeguard their personal property, and that if something happens, the landlord is liable, and the landlord’s insurance will pay for the damage.

In all the states with which the writer is familiar, the opposite is true. Provided common areas comply with the fire codes, other applicable building and security codes are followed, and the landlord is not guilty of negligence, the landlord, and his insurance, is not liable for the tenant’s loss in the event of catastrophe.

The better part of wisdom is to emphasize, at the point of signing the rental agreement, that the tenant is fully responsible for his own possessions. Make it clear that insurance is the tenant’s responsibility. With many tenants, insurance is not an issue. Their personal belongings, as treasured as they may be to the tenants personally, simply do not have the monetary value to justify an outlay for an insurance premium. Some, however, would gladly pay a premium for protection of their personal property, and if you inform them that such insurance is their responsibility and that it is available, you will be doing them a major service.

Some landlords even offer referrals to companies which specialize in writing renter’s insurance policies. You might take an hour one day to locate such a company and obtain some of their brochures or business cards, so you can supply one to the new tenant at the lease signing.

If you do so, however, be sure to disclaim any endorsement of the company, and never, ever, put yourself in the position of receiving quid pro quo for the referral. Although this sometimes happens, it is illegal, or, at best, unethical. Leave yourself free honestly to say that you offer the information only because you think it is a good idea, and that you make no profit if they buy a policy.

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