Insurance Excess Tenancy Agreement

When renting a property, a tenancy agreement is a crucial document that outlines the terms and conditions of the lease. One of the elements that tenants must pay attention to is the insurance excess clause.

An insurance excess clause in a tenancy agreement is a provision that outlines the amount of money a tenant is responsible for in case of damage to the property covered by the insurance policy. The amount is usually a fixed sum and is payable by the tenant in addition to the cost of repairs.

It`s essential to note that the insurance excess clause is different from the security deposit, which is usually paid at the start of the tenancy and is returned at the end if there`s no damage done to the property. The excess clause is a separate provision that specifies the amount the tenant is liable to pay in case of damage.

For instance, if the insurance policy covers damages up to £1,000, and the insurance excess clause states that the tenant is responsible for £200, the tenant will have to pay the first £200 out of their pocket before the insurance policy covers the remaining £800.

It`s important to ensure that the insurance excess clause is included in the tenancy agreement and that the tenant is aware of the amount they are responsible for. This is because tenants might assume that all costs associated with the property are covered by the rent they pay, which could lead to misunderstandings.

Moreover, it`s crucial to ensure that the amount stated in the insurance excess clause is reasonable and not exorbitant. This is because the excess amount could be used as a loophole by the landlord to charge tenants excessively for minor damages or wear and tear, leading to a dispute.

In conclusion, the insurance excess clause in a tenancy agreement is a crucial provision that tenants must pay attention to when renting a property. It`s essential to ensure that the clause is included in the agreement and that the tenant is aware of the amount they are responsible for. This can help avoid disputes and misunderstandings during the lease period.