rental insurance do you require it?
Charlotte GoodmanPro Member
Member since 2020 · 63 posts · 31 votesrental insurance do you require it?
Most Popular Reply
Investor · San Francisco, CA · Member since 2017 · 303 posts · 327 votes
10mo@Kevin Carpenter Specifically to address your question about how tenant’s insurance benefits the landlord:
Imagine you own an SFR that is tenanted and insured by you as a rental property. You are more mindful about liability than you are about having to rebuild in case of a (covered) damage to the property. As such, somehow, your Dwelling Coverage hasn't increased, at all, in the years since you bought the property and originally had it insured by the current insurer - not kept up with inflation. (Luckily, your premium hasn't gone up that much, so you were happy with that situation.)
Then imagine that one morning you get a call (the property is on the other side of the country from you) that there was a fire, and the tenant claims that it was a wire in the attic that the FD found to have been chewed on by a rodent that caused a short and led to the insulation catching on fire… total loss, except exterior walls.
You file a claim with your insurer. Your adjuster congratulates you that you are going to get paid 100% of your Dwelling Coverage. Great. But there is a problem:
Your own adjuster’s report shows a *gap* of, say $50k, between what the adjuster estimates it will cost to rebuild and your policy’s maximum. And you soon find out that any (licensed) GC quote you get is also for around that same gap. But here’s where tenant’s having their own liability coverage should come in:
Remember that attic wire? Well, the FD report doesn’t happen to mention it, like at all. What it does mention is that the tenant had an extension cord connected to a camera in the back patio. The tenant knew before the fire that the camera was not operational. The FD personnel look at the extension cord and note multiple (!) rodent chew/bite marks on it, which (after a separate follow-up) they confirm to you predate the day of the fire. The FD personnel also note in the report that said cord was meandering under firewood and in the immediate vicinity of fire starter logs for the tenant’s backyard fire pit. Physical evidence shows that the fire started there, grew to reach the eaves, spread across the attic… add two fire hoses…
The cord, the camera, the firewood, and the fire pit all belonged to the tenant - the one who probably didn’t think you’d ever read the FD report. Luckily, they were insured. And they were covered for negligence. (But if the facts of the case, as I described, should actually suggest to their insurer that it was gross negligence, they were not covered for that.)
This happened to a “friend” a couple of months ago. The claim to the tenant’s policy is currently pending. Had the landlord known the (actual true) facts about how the fire happened in the beginning, this landlord would only have filed a claim directly against the tenant’s policy only.
17 Replies
- 10moColleen F.Pro MemberInvestor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
yes. I require it but I don't mandate a company.
- Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes10mo
I require it. But… I tried to make my first claim against a tenant’s insurance company in 20 years this year and it was useless. They had what I thought was a respectable company (USAA) and it turns out they don’t cover water damage. What a joke.
- Member since 2020 · 63 posts · 31 votes10mo
Quote from @Bill B.:
I require it. But… I tried to make my first claim against a tenant’s insurance company in 20 years this year and it was useless. They had what I thought was a respectable company (USAA) and it turns out they don’t cover water damage. What a joke.
Im sorry, Ithought USAA was a good company.
- Northeastern Pennsylvania · Member since 2025 · 44 posts · 18 votes10mo
@Charlotte Goodman Wow ~ I thought they were too !?
- 10moOwen RosenBusiness MemberProfessional · Clinton Township, MI · Member since 2015 · 676 posts · 259 votes
Quote from @Bill B.:
I require it. But… I tried to make my first claim against a tenant’s insurance company in 20 years this year and it was useless. They had what I thought was a respectable company (USAA) and it turns out they don’t cover water damage. What a joke.
Hello Bill-
I'm an insurance agent. I have no affiliation with USAA. Just curious what happened here. Most renters insurance covers water damage but there are a lot of different kinds of water damage and most renters insurance also wouldn't cover some of those types - no matter the company.
Curious what happened in your situation if you can elaborate. It might be a good learning experience for me and the rest of BP. Perhaps for you as well.
Thanks!
Royal Oath Insurance Group4.9204 Reviews
- Member since 2020 · 63 posts · 31 votes10mo
sooo if your tenant doesnt have renters insurance, is there a way to provide insurance through me? I its an extra 15 bucks a month or less for the insurance, can I do something like that? is there a company that does that?
thanks
- Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes10mo
Me too. (On USAA)
I know it’s not legal for you to get insurance in your tenants name. But you could add it to the rent and then make the payment directly to the insurance company. Get a couple quotes and if it ballparks at $240 a year you have an addendum that says there’s a $20/month fee for renters insurance. If they sign up for it you will send the payment to the insurance company. If not you will keep the $20/month fee and self insure. - Northeastern Pennsylvania · Member since 2025 · 44 posts · 18 votes10mo
New guys here ~ how does tenants insurance benefit the landlord ?
- Member since 2020 · 63 posts · 31 votes10mo
Quote from @Kevin Carpenter:
New guys here ~ how does tenants insurance benefit the landlord ?
Supposedly, if the tenant does something irresponsible ..say floods the apartment or smokes in bed catching the place on fire, you go after their insurance company. I think thats how it works. Other tenants lets say you have a duplex are able to have their property replaced as well.
- Northeastern Pennsylvania · Member since 2025 · 44 posts · 18 votes10mo
@Charlotte Goodman Ty ~ have an offer in on a duplex ' will be my first rental. I will do this insurance thing too 👍🙂
- Investor · San Francisco, CA · Member since 2017 · 303 posts · 327 votes10mo
@Kevin Carpenter Specifically to address your question about how tenant’s insurance benefits the landlord:
Imagine you own an SFR that is tenanted and insured by you as a rental property. You are more mindful about liability than you are about having to rebuild in case of a (covered) damage to the property. As such, somehow, your Dwelling Coverage hasn't increased, at all, in the years since you bought the property and originally had it insured by the current insurer - not kept up with inflation. (Luckily, your premium hasn't gone up that much, so you were happy with that situation.)
Then imagine that one morning you get a call (the property is on the other side of the country from you) that there was a fire, and the tenant claims that it was a wire in the attic that the FD found to have been chewed on by a rodent that caused a short and led to the insulation catching on fire… total loss, except exterior walls.
You file a claim with your insurer. Your adjuster congratulates you that you are going to get paid 100% of your Dwelling Coverage. Great. But there is a problem:
Your own adjuster’s report shows a *gap* of, say $50k, between what the adjuster estimates it will cost to rebuild and your policy’s maximum. And you soon find out that any (licensed) GC quote you get is also for around that same gap. But here’s where tenant’s having their own liability coverage should come in:
Remember that attic wire? Well, the FD report doesn’t happen to mention it, like at all. What it does mention is that the tenant had an extension cord connected to a camera in the back patio. The tenant knew before the fire that the camera was not operational. The FD personnel look at the extension cord and note multiple (!) rodent chew/bite marks on it, which (after a separate follow-up) they confirm to you predate the day of the fire. The FD personnel also note in the report that said cord was meandering under firewood and in the immediate vicinity of fire starter logs for the tenant’s backyard fire pit. Physical evidence shows that the fire started there, grew to reach the eaves, spread across the attic… add two fire hoses…
The cord, the camera, the firewood, and the fire pit all belonged to the tenant - the one who probably didn’t think you’d ever read the FD report. Luckily, they were insured. And they were covered for negligence. (But if the facts of the case, as I described, should actually suggest to their insurer that it was gross negligence, they were not covered for that.)
This happened to a “friend” a couple of months ago. The claim to the tenant’s policy is currently pending. Had the landlord known the (actual true) facts about how the fire happened in the beginning, this landlord would only have filed a claim directly against the tenant’s policy only.
- Northeastern Pennsylvania · Member since 2025 · 44 posts · 18 votes10mo
@Al D. Thank you, that was very helpful. 👍
- Member since 2020 · 63 posts · 31 votes9mo
Quote from @Al D.:
@Kevin Carpenter Specifically to address your question about how tenant’s insurance benefits the landlord:
Imagine you own an SFR that is tenanted and insured by you as a rental property. You are more mindful about liability than you are about having to rebuild in case of a (covered) damage to the property. As such, somehow, your Dwelling Coverage hasn't increased, at all, in the years since you bought the property and originally had it insured by the current insurer - not kept up with inflation. (Luckily, your premium hasn't gone up that much, so you were happy with that situation.)
Then imagine that one morning you get a call (the property is on the other side of the country from you) that there was a fire, and the tenant claims that it was a wire in the attic that the FD found to have been chewed on by a rodent that caused a short and led to the insulation catching on fire… total loss, except exterior walls.
You file a claim with your insurer. Your adjuster congratulates you that you are going to get paid 100% of your Dwelling Coverage. Great. But there is a problem:
Your own adjuster’s report shows a *gap* of, say $50k, between what the adjuster estimates it will cost to rebuild and your policy’s maximum. And you soon find out that any (licensed) GC quote you get is also for around that same gap. But here’s where tenant’s having their own liability coverage should come in:
Remember that attic wire? Well, the FD report doesn’t happen to mention it, like at all. What it does mention is that the tenant had an extension cord connected to a camera in the back patio. The tenant knew before the fire that the camera was not operational. The FD personnel look at the extension cord and note multiple (!) rodent chew/bite marks on it, which (after a separate follow-up) they confirm to you predate the day of the fire. The FD personnel also note in the report that said cord was meandering under firewood and in the immediate vicinity of fire starter logs for the tenant’s backyard fire pit. Physical evidence shows that the fire started there, grew to reach the eaves, spread across the attic… add two fire hoses…
The cord, the camera, the firewood, and the fire pit all belonged to the tenant - the one who probably didn’t think you’d ever read the FD report. Luckily, they were insured. And they were covered for negligence. (But if the facts of the case, as I described, should actually suggest to their insurer that it was gross negligence, they were not covered for that.)
This happened to a “friend” a couple of months ago. The claim to the tenant’s policy is currently pending. Had the landlord known the (actual true) facts about how the fire happened in the beginning, this landlord would only have filed a claim directly against the tenant’s policy only.
extremely helpful thanks
- Northeastern Pennsylvania · Member since 2025 · 44 posts · 18 votes10mo
In a co-living scenario would renters insurance also be a good idea ?
' seems it would be.
- Member since 2020 · 63 posts · 31 votes9mo
Quote from @Kevin Carpenter:
In a co-living scenario would renters insurance also be a good idea ?
' seems it would be.
what does co living situation even mean?
- Northeastern Pennsylvania · Member since 2025 · 44 posts · 18 votes9mo
@Charlotte Goodman ' love your ' name ' ~ big scooter fan all my life !
anyway co-living is big house lots of bedrooms rented individually with shared common spaces & all util's included
check vid's on YTube 👍
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