What are Improvements and Betterments?
Improvements and Betterments are modifications or enhancements made by a tenant to a leased property to increase its value or usability. These alterations are usually beyond basic maintenance and involve upgrades to the structure, such as installing new fixtures, modifying layouts, or adding equipment. For example, a tenant might install high-end lighting, upgraded flooring, or customized workspaces in a commercial lease.
In the context of property insurance, the term “Improvements and Betterments” is relevant because tenants typically invest in these upgrades, which are not covered under the landlord’s insurance policy. Tenants may need to insure these modifications separately, ensuring that their investments are protected in the event of damage or loss due to events like fire, flood, or theft.
Insurance policies for tenants often include coverage options for improvements and betterments to ensure the costs associated with these upgrades are recoverable. Without such coverage, tenants could face financial losses if their improvements are damaged and are not covered under the landlord’s policy.
Additionally, tenants should carefully review lease agreements, as responsibility for maintaining or restoring these improvements upon termination of the lease could fall on them.