Insurance for rented homes: What both landlords and tenants need to know

In the context of the real estate market of the Republic of Moldova, rented homes bring benefits both to landlords and tenants – but they also involve specific risks. This is because rental contracts shift responsibilities between the parties and create the possibility of damages that may generate significant costs. According to data, only approximately 2–3% of homes are insured in Moldova.

This highlights a major vulnerability when the property is used by a third party (the tenant). On the other hand, the rental market is dynamic, with increasing rental prices and higher demand in the municipality of Chișinău and surrounding areas.

Thus, clarity regarding insurance – who is responsible for what – becomes crucial: the landlord must protect the real estate asset (the building structure, installations, liability toward third parties), and the tenant must protect their personal belongings and have civil liability coverage toward the landlord or neighbors.

For the landlord, insurance for a home rented out must include products adapted to its use by a tenant – meaning not only the building structure but also risks generated by rental activity.

What a landlord’s policy should cover:

• Building structure and finishes: damage caused by fire, explosions, lightning, storm, hail, flooding (both from rainfall and internal leaks), or landslides. According to studies, most homes are uninsured, and damage costs can be enormous.

• Installations and fixed integrated items: if they are included in the property and part of the rental contract (e.g., shared washing machine, central heating system, boiler).

• Civil liability toward third parties: if the landlord is responsible for malfunctions or deterioration affecting neighbors or tenants (for example, a major leak that causes flooding to a neighbor).

• Loss of rent: optionally, some policies may provide compensation if the home becomes uninhabitable after an insured event and the landlord loses rental income.

• Restoration costs: demolition, reconstruction, temporary relocation, if included in the policy conditions.

Advantages of this insurance for the landlord:

• Protection against the loss of the real estate investment – in Moldova, rising housing prices increase the stakes for repair and restoration.

• Clarification of responsibilities in rental contracts – contracts may specify that the landlord will maintain building insurance, creating transparency for the tenant.

• Reduced risk of litigation: if the landlord has a policy that includes civil liability, the costs for damages caused to third parties will not fall solely on the landlord/the tenant.

• Increased attractiveness for tenants: an insured home can give tenants confidence that the space is maintained and protected.

Special considerations:

— The insured sum must reflect the real reconstruction cost and not just market value. Underestimation may lead to insufficient compensation.
— Check exclusions: normal wear and tear, lack of maintenance, intentional acts, excluded phenomena (e.g., earthquakes if not explicitly included).
— Clarify in the contract who pays the premium: if the tenant contributes, this must be stated.

The tenant has distinct responsibilities toward the landlord, toward their own belongings, and toward neighbors. Tenant insurance must cover these risks.

What a tenant’s policy should cover:

• Personal movable property: furniture, electronics, household appliances, personal items – covered against risks such as theft, fire, flooding, vandalism.

• Tenant’s civil liability: if the tenant, through negligence or careless behavior, causes damage to the property (e.g., leaks, accidental fire) or to neighbors (water leaking into another apartment).

• Improvements made to the rented space: if the tenant has invested in finishes, furniture, or modifications, some policies allow these items to be included.

Advantages of insurance for the tenant:

• Direct protection for personal belongings – without a policy, a storm, fire, or vandalism could leave the tenant without furniture or appliances.

• Financial peace of mind and contractual clarity – if the rental contract requires insurance, the tenant avoids penalties or losing the deposit.

• Improved relationship with the landlord – an insured tenant demonstrates responsibility, and the landlord may be more open to renegotiation or better conditions.

• Protection for liability – repair costs for damage caused to the property or neighbors can be significant; a liability policy ensures the tenant will not pay the full amount out of pocket.

Important aspects for the tenant:

— Check what the policy excludes: usually normal wear and tear, intentional acts, renovations without notification, lack of maintenance.
— Pay attention to deductibles: a high deductible may reduce the premium but may mean higher out-of-pocket costs for minor damage.
— Check the distribution of responsibilities in the rental contract: e.g., if the landlord refuses to maintain installations – the tenant must know what falls under their responsibility.
— Ensure the policy is valid from the moment you move in and that renovation/adaptation conditions are clear.

Effective protection of a rented home requires effort from both sides: the landlord and the tenant must be informed and insured. If only the landlord is insured, the tenant remains vulnerable to personal property loss or liability costs. If only the tenant is insured, the landlord remains exposed to major structural damage, loss of rent, or claims from third parties.

Therefore, a landlord policy + a tenant-adapted policy provide:

• complete protection for the building and belongings,
• contractual clarity,
• balanced relationships between parties,
• reduced risk of costly disputes.

In addition, in a growing real estate market (higher prices/usage) and in a climate of increasing risks (floods, storms, deterioration), anticipating and protecting ourselves is more important than ever.