Although you may be excited to get into your new apartment, make sure you take time to understand the insurance requirements in the lease agreement. Having lease liability insurance can protect you from unexpected events such as damage or theft to personal property, liability for guest injury or damage to the building.
To reduce risk, working closely with a broker can help you understand what insurance you will need. An agent can read through the lease agreement to help you find a policy that will protect and cover your risks. They might even help you negotiate strict requirements primarily set by your landlord.
Understand the Different Types of Leases
The type of insurance necessary will vary depending on your lease requirements. Here are the standard types of lease agreements:
- Single Net. This requires you to only pay property taxes on top of your rent.
- Double Net. The lessee will pay insurance premiums as well as monthly rent and property taxes.
- Triple Net. In addition to rent, the lessee will pay structural maintenance, repairs and insurance premiums.
- Full-Service. This requires the lessee to only pay base rent, while the landlord covers operating expenses such as property taxes, insurance, and common area maintenance.
Taking the time to understand your lease requirements can help you arrange for sufficient lease liability insurance for your tenancy. You never want to be pulled into a lawsuit because you weren’t adequately covered.