Real World Scenario: What to do when your tenant drives through the living room?

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One of our goals in writing blog posts every week is to provide useful education. We recently saw an excellent article on BiggerPockets.com that talked about “What to do when your tenant drives through the living room?” BiggerPockets.com is a website devoted to helping real estate investors.

Paul, our Director of Investor Services, checks articles on BiggerPockets.com every day, looking for helpful information for our investment community. We’ve learned a lot from the articles we’ve read and conversations we’ve had related to BiggerPockets.com.

Home Rental Services: What if?In this article, Nathan Miller talks about the real world scenario where one of his tenants accidentally drove a car into the living room of their rental property. It was a 16 year old child and an unfortunate mistake. Nathan goes on to talk about the steps he followed to figure out what needed to happen next.

Three Steps to Take when a Tenant Causes Property Damage

  1. Talk to your tenants.
  2. Call your insurance provider.
  3. Contact your tenant’s insurance provider.

We liked this approach for a few reasons:

Communication is key whenever there is a situation. Talking with your tenants to understand what happened gives you the opportunity to set the tone. If they’ve been good tenants for a long time, it could be an opportunity to demonstrate that you are all in this together as you work towards fixing the problem. It would be understandable if you were upset and nervous about the damage… but talking with your tenant while in that frame of mind probably wouldn’t be helpful.

Calling your insurance provider is a great next step. You want your insurance provider to know there has been an event that could result in a claim. In this case, the tenant’s auto insurance provider would be responsible for covering the damages, but what if the driver was not insured? This story might also be a good reminder to double check with your provider that you have the appropriate coverage in place for a rental property. If you haven’t done so in a few years, we encourage you to call your agent for a quick review.

Finally, contacting your tenant’s insurance provider in a timely manner is the next step. This should happen as soon as possible once you’ve been made aware of a problem involving damage to your property.

We’ve never had a tenant drive a car into a property we manage. Knock on wood. But we thought it might be helpful to share it with anyone that owns an investment property because it makes you think about, “what if?” Making sure you have the right insurance in place before you have a problem could save you many thousands of dollars due to a claim that isn’t covered.

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