Insurance with a waiver of recourse is taken out by an owner or co-ownership association for a property that is let out. It is a traditional fire insurance policy to which a waiver-of-recourse clause has been added.
The easiest way to explain it is with an example.
Imagine that you own a small building in Etterbeek containing four units. You have taken out fire insurance with a waiver of recourse to protect your property.
You can rest easy because, even if your tenant, who has no insurance of their own, causes damage to your flat, your insurance will cover the costs incurred, subject to certain conditions.
However, you are advised to inform your tenant that this insurance does not cover their personal belongings, such as furniture, in the event of fire or theft. We recommend including this information in the tenancy agreement at the start of the tenancy and increasing the charges slightly by an amount equivalent to the additional cost associated with the waiver-of-recourse clause. By subscribing to this clause, the tenant will in any event pay less than if they took out their own tenant insurance.
This clause offers the owner two advantages:
- You do not need to carry out an annual check to ensure that your tenant has taken out tenant insurance to cover any damage.
- You avoid the risk of two insurers taking action against one another in the event
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