Should You Require Renters Insurance?
Renters insurance is a policy that protects tenants who live in a rental property. Renters insurance policies typically include three types of coverage.
Personal Property coverage:
These generally cover the cost of replacing or repairing a tenant's personal property in the event that it is stolen or damaged.
Liability:
Tenants will be covered if another person is injured or damages their property.
Additional living expenses coverage:
This coverage generally covers extra living expenses such as a hotel bill.
Tenants can purchase renters insurance to increase their rental protection and reduce costs.
What are some of the benefits for landlords from renters insurance?
There are a few reasons landlords might consider renting renters insurance.
This helps to reduce conflict risk. For example, a tenant who does not have renters insurance might turn to you for help in replacing the items.
Minimizes damage from tenants' pets:
Renter's insurance should include coverage for any damage caused by tenants' pets.
Gives you peace of mind:
In addition, it helps to reduce stress for landlords.
What are some of the benefits for tenants who have renters insurance?
Tenants may ask, "Why is renters insurance necessary?" You can inform them about the many benefits of renting insurance. Renters insurance could cover:
Costs of lodging after a disaster:
Renter's insurance policies may cover extra living expenses and temporary housing in the event that a rental is too damaged.
Items are taken away from the rental
Items the tenant borrowed:
Renter's insurance policies generally cover possessions.
A tenant's child does damage:
Therefore, the renter's liability insurance policies will usually cover damage caused by the tenant's children.
Legal expenses if a tenant sued:
If someone is injured on your tenant's property and you are sued, your tenant's liability insurance policy may cover the legal costs up to the policy limits.
Injured guests may be charged with medical expenses:
Renter's insurance policies can provide some coverage, but not all.
Why should landlords require renters insurance?
Many renters believe that their landlord's insurance policy covers them. However, the landlord's and homeowners insurance policies usually only cover the rental building and not the tenants' personal property in case it is stolen or damaged. Therefore, tenants may find it helpful to have renters insurance in case of theft, damage, or accident.
Can a landlord require renters insurance?
Only if all tenants require it, can landlords require tenants to have renters insurance. Although renters insurance isn't required by law, it can be beneficial to both the landlord and the tenant.
How do you make sure your tenants have renters insurance?
Renters insurance is something you should require. First, make sure that the lease agreement states that it is required. To verify that they have continued their coverage, you can ask for proof of insurance each year at your lease renewal. You should also consult an attorney to learn more about renters insurance in your area.
What coverage should a landlord need?
Each property and tenant will determine the coverage amount. Consider asking the tenant to have personal property coverage that covers them for any loss or damage. Talk to an insurance broker about liability coverage. It is a good idea to specify the minimum coverage amount in your lease agreement.
Remember that your tenant's total cost could increase depending on the amount of coverage they need. In some cases, you may also need to maintain similar liability coverage.
What do renters insurance cost tenants?
Renters insurance rates typically range between $15 and $30 per month, but costs can vary depending on:
Location
Property size
Claim history
Coverage
Premiums may rise if the property is in a flood area or if tenants have to protect high-value items such as jewelry and electronics.
How can you add renters insurance to a lease?
A local attorney can help you include renters insurance in your lease.
Renters can have concerns about affordability, so make sure you include this requirement in the rental listing. Renters insurance can also be an expense that your renter will have to pay, so it is important to disclose all costs associated with renting your property.
Refer prospective renters to an insurance broker if they have any questions about renters insurance. For example, renters who have auto or other item insurance may be eligible for renters insurance. This allows them to combine different types of coverage.
