Yes, the TPP will alleviate the need to verify and track renters insurance and protect you, the investor, against losses that are no fault of your own. The TPP allows your property carrier to recover some of their cost in the event of a loss to help stabilize your property insurance costs in the long term.
Imagine a tenant leaves a candle burning causing a fire loss estimated at $70,000. Your property carrier will first step in to cover the loss. If your tenant carries a renters insurance policy with a $30,000 limit of liability, your property carrier will submit the loss to the tenant’s policy to recover $30,000 of the claim they paid out, then submit the remaining $40,000 of the loss they covered against the TPP. The tenant’s renters insurance is the primary coverage and TPP is in excess.
You can recover $1,000 per lease, limited to the equivalent of one month’s rent up to $1,000. If your monthly rent is $500 and your tenant breaks the lease, you can receive $500 for the first month of vacancy. That is the most you can receive from this vacancy. However, if you place a new tenant who gets deployed (breaking the lease) four months into the lease, you can submit a new Skip Rent claim against the TPP. Please note that Skip Rent coverage is not triggered if a tenant simply does not pay rent but continues to reside in the unit. A broken lease or completed eviction is required for the policy to pay.
To add TPP to your properties, contact your Client Service Representative or call 888-741-8454.