Landlord's Reminder: When Does Insurance Cover Damage Caused by Tenants?

Renting out real estate is an important source of additional income for many people, but handing over your home to strangers always comes with risk, because despite thorough background checks, tenants' living habits may differ from the landlord's, and when the lease ends, disputes can arise over who should cover the damages. What are common dispute issues and in which cases is it worth seeking help from insurance?

According to statistics, 70 percent of Estonians have home insurance, but very few know in detail which cases the insurance covers. According to the results of the last census, 18.3% of people in Estonia rent their homes, so insurance companies deal with handling damages caused by tenants quite regularly. Although the home owner does not change when renting it out and regular home insurance remains valid in cases such as fire, natural disasters, or other events specified in the conditions, to specifically compensate for damages caused by tenants, an additional insurance coverage for home insurance is needed, namely a tenant protection package.

In such a case, damages caused intentionally by tenants are covered, common examples being artwork created with markers by children on wallpaper, broken furniture, or lost rental income.

Some examples where disputes have arisen between tenant and landlord regarding damage compensation:

Children's drawings on walls. While leaking or broken pipes are one of the biggest causes of damage in homes and it is more or less clear to everyone that this is an insurance case, many do not know that insurance compensation can be claimed even when children have scribbled on walls with some drawing tool.

Broken furniture or home appliances. If a tenant has not behaved responsibly in the rented residence and has damaged furniture and home appliances, compensation can be requested from insurance. Insurance does not apply in this case if the home has been rented out for a short period, for example through a rental platform. However, with a proper lease agreement, the homeowner is protected against unpleasantness.

Poor cleaning. On the Estonian rental market, there have been cases where after the rental period ends, the landlord gets the property back in their possession, but the tenant has had careless living habits, so for example due to constant grease splatters the kitchen wall has been damaged or mold has formed in the bathroom and started eating away at the silicone. Insurance does not compensate for such cases, as it is considered normal wear and tear.

Damage caused by pets. It is common for pets brought to a rental home to cause trouble there over time. For example, cats love to regularly scratch soft furniture, and a parrot let loose in the room can very skillfully relieve itself in all sorts of corners. Insurance generally does not cover damage caused by tenants' pets.

Loss of rental income. In case the landlord would lose rental payments due to damage caused by tenants, because it is not possible to rent out the apartment again, compensation for lost income can be requested from insurance.

Cases related to home insurance can be very different and what the insurance covers may vary depending on the insurance contract concluded and the insurance company. When concluding an insurance contract, it is therefore always important to familiarize yourself thoroughly with the contract terms, and if anything remains unclear, you can always ask the insurance company. From time to time it is worth reading your insurance contract again just to refresh your memory, so that you remember the nuances of the insurance conditions well.

Source: Moodnekodu.ee