Tenants Liability Insurance (TLI) exists to give peace of mind to tenants and landlords alike. For tenants, TLI makes it easier to shoulder the liabilities that come with living in someone else’s property. For landlords, it mitigates some of the risks of taking on tenants in the first place.

How does tenant’s liability insurance work?

You wouldn’t just let anyone borrow your laptop, borrow your bike or borrow your car. So it’s understandable that people have certain reservations when it comes to you borrowing their house.

In the same way as you’d hate a borrower to drop your laptop or crash your bike – or even just lose the cool bell you’ve got on it – landlords naturally want to avoid damage to their property.

This is one of the reasons that we have security deposits. Knowing your landlord holds a significant chunk of your money gives you a serious incentive to look after the property as if it were your own.

From leaks and spillages to breakages and burns: as a tenant you’re liable for any damage you cause to landlords’ contents, furniture, fittings or fixtures. In principle, this money will come straight out of your security deposit. And the bad news is it could easily exceed your security deposit.

Monopoly money on Monopoly board

However conscientious you are, accidents can happen in any house. So tenants must live with the constant risk of losing some or all of their deposit – or of being hit with a still more substantial repair bill.

This is where Tenant’s Liability Insurance (TLI) comes in. TLI protects your landlord’s things while those things are in your care. So, if you end up damaging them, you don’t bear the cost – an insurer does.

This peace of mind works for landlords too. If you have TLI in place, then your landlord will be happy that any damage to their property will be made good swiftly and not disputed. And this is precisely why many landlords and letting agencies insist on TLI in their tenancy agreements.

However, you should never just rush into an insurance purchase. You should first understand specifically what needs covering, as this way you can match available cover to your needs. So it’s important to remember here that tenants are not liable for everything that can go wrong in a rented property. Indeed, many things are exclusively the concern of the landlord.

Here’s a brief overview of what – generally speaking – is expected of landlords and tenants respectively.

Landlord’s Liability

So, firstly, what is expected of landlords? Well, there’s some good news for tenants here. The landlord is the only person responsible for the health of the building itself, and this should come under their home insurance. As a renter then, you don’t have to worry about:

  • Structural integrity of buildings: including foundations, walls and roofs
  • Weather damage to external fixtures like drains, gutters and windows
  • Old wiring and electrics
  • Malfunctioning plumbing, gas and heating systems

So, if the property you’re renting sinks into a swamp… you at least have the consolation of knowing you don’t have to pay to rebuild it. This cost falls to the landlord and their home insurer.

However, it’s worth noting that you’d hardly come off well in the above example, as you’d still lose all your own valuables in the house. This is why it always pays to have contents cover, so that you can claim them back.

Monopoly board, ship counter on Water Works

Landlords are also responsible for keeping on top of reasonable wear and tear in and about the property.

Wear and tear is anything you could reasonably expect over time as a natural result of people living somewhere. Examples include:

  • appliances broken down due to age
  • tired paintwork
  • scratches or marks on furniture and surfaces
  • discoloured or tired-looking furnishings and upholstery
  • issues with condensation, mould or damp

Remember: your landlord should never pass on the cost of wear and tear to you, nor should it be deducted from your deposit.

Tenant’s Liability

You may have read in your tenancy agreement that you are responsible for looking after the property in a tenant-like way. But what does this mean?

The most important point is not to damage the building or any of the furniture, fittings or fixtures. It’s also your responsibility to ensure that your guests, visitors and pets don’t do this either.

Damage differs from wear and tear in the sense that it does not arise through reasonable use. So, smashed windows, stained carpets, cigarette burns and broken chairs, tables or bed frames are all examples of damage.

Irrespective of whether they caused it or not, tenants have a duty to inform their landlords of any damage as early as possible.

This creates the best outcome for all parties. Landlords can nip issues in the bud before they become more expensive to fix. And tenants, depending on the nature of the repair, enjoy a nicer, brighter, safer or warmer property.

If you knowingly allow a situation in the property to deteriorate, landlords may be able to claim some of the eventual repair costs back from you. This applies even if you’re not otherwise liable for the damage. So, if your rental property begins to slip into that swamp – get on the phone, or at least send an email, to your landlord!

Additionally, behaving in a tenant-like way entails:

  • Keeping the property clean or arranging for a cleaner
  • Changing fuses and light-bulbs on an on-going basis
  • Using fixtures and fittings as they’re meant to be used – so no tobogganing down those stairs …

The precise upkeep regime expected by landlords varies from case to case and depends on the exact nature of the property. For this reason, we recommend you always check the terms and conditions of your tenancy agreement to understand your specific duties and responsibilities.

Monopoly board, car token on Go

Remember: while you have a duty of care towards your landlord’s things, your landlord is generally not responsible for loss or damage to your things.

Tenants Liability Insurance: Do I Need It?

Many landlords and agencies stipulate that you must have some level of Tenant’s Liability Insurance in place. If so, this should be clearly stated in your tenancy agreement. While landlords can make TLI a condition of your tenancy, they can’t force you to buy cover from a particular provider. This at least gives you leeway to shop around for different deals.

In other cases, there’s no requirement to take out Tenants Liability Insurance. However, it’s certainly something you want to consider.

Unless you’re renting an unfurnished flat, the chances are your property contains breakable stuff belonging to your landlord. And you could be pursued for any damage. Many factors are in play here, including your own circumstances and risk appetite, and the likely repair cost of an accident.

Naturally, a rental property full of Ming vases will give you more sleepless nights than one kitted out with flat-pack furniture. And while many landlords do have their own contents insurance as a fall-back, they won’t necessarily relish claiming on this if there’s an easy alternative (claiming can mean having to pay a deductible, plus higher premiums in future).

If you’re in any way concerned about the status of valuable items in your care during your tenancy, we recommend that you raise this point with your landlord or letting agency.

You can take out Tenant Liability Insurance as a standalone or as an extension of a general contents insurance policy covering your own things. If you already have contents insurance, then check if this includes any TLI provision – you may already be covered.

In Summary

  • TLI is not a legal requirement but landlords and letting agencies may insist that renters take it out
  • landlords are responsible for buildings and for reasonable wear and tear
  • tenants are liable for their own contents within the property
  • they also have a duty to live in a tenant-like manner, including the timely reporting of any damage
  • tenants are liable for damage they have caused to landlords’ contents (including furniture, fittings and fixtures)
  • this includes damage caused by tenants’ visitors and pets
  • you can take out TLI as a standalone or as part of a broader contents insurance policy
  • always check the terms and conditions of your tenancy agreement (and of your insurance policy)

Keep these guidelines in mind and you should have a long and blissful tenancy. Happy renting!

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