When you rent out your property, your tenant must take out home insurance . It must cover the risks for which they may or may not be responsible throughout the duration of the lease. Here’s what you need to know as a landlord about home insurance and liability insurance that your tenant must obtain. An overview of what it covers, when to request a certificate, and what to do if your tenant is not covered.
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The essence of the matter:
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The importance of home insurance for the tenant
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Article 7 g) of Law No. 89-462 of July 6, 1989 requires the tenant to insure against the risks they may face. Home insurance must cover the dwelling in case of:
- fire;
- explosion;
- water damage.
Mandatory home insurance is used to insure the dwelling as real estate. This means it may only be necessary to prevent risks caused to what cannot be moved and characterizes the dwelling (walls, floors, ceilings, roofs, doors and windows, fixed installations such as plumbing…).
The tenant may choose to take out liability and damage insurance and subscribe to additional coverage, such as:
- storm risks;
- natural disasters;
- technological disasters;
- Acts of terrorism or attacks.
However, the tenant is not required to be covered against these risks, only damage caused by fire, explosion, or water is covered by the mandatory insurance for the tenant.
In the event of an accident (fire, explosion, or water damage), the tenant’s insurance covers repair or reconstruction costs. When the dwelling is adjacent or located in a building, home insurance covers all damage caused to neighboring dwellings if the origin of the claim comes from the insured property.
It should be noted that multi-risk home insurance does not covermaterial damage that the tenant may have caused intentionally in the property. In this case, as a landlord, you may take out insurance covering these risks.
When should we check that the dwelling is properly insured?
Home insurance is payable for the rental of unfurnished properties. It is not mandatory for:
- seasonal rentals;
- furnished rentals;
- functional housing.
The law requires the tenant to take out home insurance as soon as they enter the premises. As a landlord, you have the right to request a home insurance certificate as soon as the keys are handed over. This clause in the rental agreement cannot be ignored by the tenant. Once the tenant is compliant and settled in the dwelling, you can check that the property is insured, and this:
- annually, on the anniversary date of the lease signing;
- upon lease renewal.
To prove that the property is insured, it is sufficient for the tenant to present a home insurance certificate indicating the period covered by the contract. In case of refusal to present it, you can take measures to:
- insure the accommodation yourself and add the cost of the annual premium to the rent amount. The amount is recoverable by adding 1/12th of the premium to the monthly rent;
- terminate the lease for legitimate and serious reasons.
What to do if property and liability insurance is not provided?
The Alur Law of March 24, 2014 amended Article 7 of the law of July 6, 1989. Now, as a landlord, you have two options if the tenant refuses to insure the dwelling.
Before taking any action, you must send the tenant a formal notice by registered letter with acknowledgment of receipt informing them that they are not complying with the lease conditions. If the tenant has not presented an official insurance certificate one month after receiving the letter, the property may be considered uninsured. You can therefore:
- insure the accommodation yourself and add the cost of the annual premium to the rent. The amount is recoverable by adding 1/12th of the premium to the monthly rent;
- terminate the lease for lack of insurance. A clause must provide for the termination of the rental agreement in case of refusal by the tenant to insure the property.
In case of lack of home insurance on the part of the tenant, it is important to take quick action. Indeed, if no insurance covers the dwelling while a loss occurs, the damages would be entirely the responsibility of the tenant. Resorting to such a situation can take a long time, and the rental relationship could be heavily affected. Moreover, the property would not be restored during a compensation procedure.
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