As a landlord, you know you need to have insurance on your building, but you may leave the decision to buy renters insurance to your tenants. After all, it benefits them and not you, right?
While it’s true that renters insurance does benefit tenants, the fact is there are good reasons for landlords to require their tenants to obtain this coverage.
Property Insurance Cost Savings
If a tenant damages their rental unit, the claim can be made to their rental insurance rather than the landlord’s property insurance. This saves the landlord from paying a deductible and risking higher premiums in the future.
Protect Personal Property
If a tenant experiences a loss of personal property through an accident on the landlord’s property, that loss can be claimed through renters insurance. Landlords won’t get drawn into conflicts over responsibility.
Damage or Injury for Guests
If a tenant’s guest suffers property damage or injury, the renters insurance will provide compensation. This will often alleviate the injured party from seeking out landlord liability.
If the property should become uninhabitable, such as through fire or hurricane damage, renters insurance will cover temporary living expenses until the property becomes inhabitable again.
How to Talk to Tenants About Renters Insurance
The best time to discuss the benefits of renters insurance is during the tenant interview process. It is very common for a landlord to build a requirement for renters insurance into a new lease agreement. Feel free to use our resource How to Talk to Tenants About Renters Insurance to help you open up that conversation with tenants.
A Benefit to Tenants (Not Just Landlords)
Many renters forego the added expense of renters insurance as they believe their personal belongings are protected by a landlord’s property and liability insurer. However, a landlord’s insurance policy only covers the building, and it won’t protect the tenants if something happens.
What Does Renters Insurance Cover?
Items stored in a renter’s home including furniture, clothing, electronics, jewelry, and small appliances that aren’t built into the unit.
If someone other than a family member should get injured on the rental property and sues, the renters insurance policy would pay legal costs and court awards, up to the policy limit.
Extra Expense Reimbursement
If a disaster makes your home uninhabitable, for example, fire or hurricane damage, renters insurance can help pay for the cost of renting a hotel or another apartment and for meals to eat out while you are displaced.
Other People’s Property
If something happens to an item you’ve borrowed from a friend, your renters insurance may provide coverage.
Renters insurance can cover your possessions if they’re stolen from your car or a hotel room.
If your child causes damage to your neighbor’s window while playing baseball outside, your renters insurance can pay for the repair.
Most renters insurance policies provide coverage if your dog bites someone at your home or off the property.
Many companies provide affordable renters insurance. You can speak to your insurance agent or search online for a company that best fits your needs. You could have a policy with a click of a button.
If you’d like a PDF version of this information to share with your clients, you can download it here.