Everything you need to know about insurance basics, like coverage types, limits, cost and more.
Why Landlords Should Require Renters Insurance
As a property manager, you have many responsibilities. You’re collecting rent, maintaining your units and managing your insurance — these are tasks you do every month — to name only a few. But one of the things you typically aren’t responsible for is covering the personal property of your tenants, in the event of the unexpected. That’s where renters insurance comes in.
Many tenants assume that their landlord’s insurance policy will cover their personal property if the building faces damages. For instance, if there was a fire at your property, you’d be responsible for covering the damages to your building, but not for the damages to your tenant’s personal property.
If you find yourself wondering, “should I require renters insurance?” you’re not alone. Landlords often require their tenants to purchase renters insurance so that the tenants are covered for personal property, liability and loss of use events associated with the rental property.
Protecting your tenant’s personal property isn’t the only case for renters insurance. Let’s find out how renters insurance not only benefits your tenants, but ultimately benefits you as a landlord.
Can a Landlord Require Renters Insurance?
Renters insurance is not required by law, but as a landlord, you can require tenants to purchase their own renters insurance policy. You can do this by including a provision in the lease that requires your tenants to have proof of renters insurance and ensure that it remains active during their entire tenancy.
Why Do Landlords Require Renters Insurance?
As a property manager, requiring your tenants to have renters insurance clearly benefits your tenants. But how does it benefit you, the landlord? First, when a tenant has their own insurance policy, it can help shield your property management insurance policies from tenant related claims challenges. Renters insurance protects the tenant’s personal property and your rental property — it’s coverage that can help property managers avoid a potential eviction if your tenant can’t afford to pay for the damages they’ve caused.
Should a Landlord Require Renters Insurance?
As a landlord, requiring that tenants to have renters insurance can be beneficial:
Decreases the likelihood of a lawsuit
If a tenant doesn’t have renters insurance and their personal belongings face damage due to an event occurring on your property, they may try to claim that you’re responsible for covering the cost of those damages to their property. But by requiring tenants to have renters insurance, you can potentially avoid legal challenges over tenant personal property losses — since their renters insurance will typically pay for damages.
Filters out tenants
If a tenant can’t afford renters insurance, can they afford to pay rent? As a property manager, requiring renters insurance helps you find good tenants who are more likely to pay rent on time.
Provides peace of mind
Why do some apartments require renters insurance? When you mandate that your tenants have renters coverage, you’re protecting everyone’s best interests. And that can translate to a load of responsibility taken off your shoulders — which means real peace of mind!
How Should a Landlord Tell Tenants That Renters Insurance Is Required?
Many landlords are choosing to make renters insurance a requirement for their tenants. Be transparent and get the prospective tenant news right away. Make it known in your listings, indicate it when showing the rental unit and clearly state that renters insurance is required in the application process.
If it’s a renewal lease and you’re adding renters insurance as a requirement, you can let your tenant know in the renewal letter. And of course, you’ll need to include the requirement for renters insurance in your lease agreement. And send them a link to our renters calculator to help them estimate how much coverage they’ll need.
How Your Tenants Can Get Renters Insurance
So how can your tenants pick up renters insurance? It’s simple. They likely have car insurance for their vehicle — so, all they need to do is go online or call contact their insurance company and add a renters policy. In fact, with American Family, they can get a discount for bundling insurance products.
Renters insurance is affordable for your tenant too — it often costs no more than one dinner out per month! When you educate your tenant on the benefits of renters insurance, they’ll likely be more receptive once they understand it’s value. Renters coverage can save both of you headaches down the road!
Learn more about why your tenants need renters insurance and then make sure your commercial landlords insurance is also doing its best to protect your units by connecting with an American Family Insurance agent. They’ll walk you through the benefits of your coverages to help ensure you’ve got a customized policy that best protects everything you’ve worked hard for.
Looking for renters coverage ASAP? Why not get a renters insurance quote right now?
This article is for informational purposes only and is available through different sources. This information does not, and is not intended to, constitute legal advice. You should contact your attorney for legal advice specific to your situation.