Many tenants don’t think they need renters insurance… until it’s too late. Some renters simply think they don’t need it, or that it’s automatically covered by their landlord. In other cases, they underestimate the value of their possessions. Requiring a tenant to have renters insurance can help protect both them, and you, should the property become damaged or a loss occurs. Even a minimal amount of loss can cost hundreds to thousands of dollars, so the last thing you want is for your tenants to have an added burden or expense.
If you’re unsure about making renters insurance a requirement for your tenants, consider the below reasons why landlords should require renters insurance to help you decide.
Depending on where you live, you may be responsible for covering the cost of a tenant relocation in the event of a natural disaster or fire. If you aren’t required by state law, you still may feel the need to assist your tenants. There are many renters policies that offer provisional living reimbursements if a tenant has to relocate due to any unforeseen damages.
Liability policies generally don’t cover tenants if the property is damaged or a person is injured due to tenant negligence. It is beneficial for tenants to obtain renters insurance because it protects both their personal property against damage or loss, plus, it covers their personal liability if someone is injured on the property.
In many cases, tenants can get cross-market discounts on their auto insurance and their renters’ insurance, which will save them money and protect their belongings. Depending on the cost of their auto insurance, in some cases, their renter’s insurance could even be free.
As a landlord, it should give you peace of mind to know that if a loss occurred, you wouldn’t have to deal with the tenant’s loss. Then if so, you could concentrate on repairing any damage to your property instead!
Take into consideration that if a fire or other accident occurred at no fault of the tenant, but it causes damage to the tenant’s property and they have no other option to cover the loss, they could definitely come after you for damages. Your own insurance more than likely does not cover the tenant’s personal property in situations such as this, but something like renters insurance possibly could. This is a great reason why landlords should require renters insurance.
At the same time, as mentioned above, a tenant’s personal property is protected (minus their deductible) while they are away from home, or when traveling. If they lose something that is of value to them, they may not be able to pay the rent. Requiring renters insurance helps guarantee coverage for both your tenant and yourself.
It’s easier to maintain a good tenant-landlord relationship when all parties are supporting each other. Having funds immediately available to replace lost or damaged items in the event of a loss will reduce any strain on your relationships with your tenants.