Renters Insurance??? ...and How Much

7 Replies

When drafting my new Landlord lease I opted to go with Renters Insurance for my Tenants. My attorney said a minimum of 100K liability but my insurance agent suggested 300K liability for the Tenants, along with additional coverage on Tenants personal property. 

How many of you investors have Renters Insurance in your Lease Agreement with your Tenants?...and how much do you require your Tenants to carry?

@Ryan K. I have ~50 student rental units and about 140 college students that rent from me so liability is a concern.

I require all of my tenants to provide proof of renter's insurance before getting the keys. I think it's a good idea for them in case something happens to their possessions, but it also adds a potential layer of protection if one of my tenants does something dumb on my property. 

I don't require a minimum but most of tenants have 300k liability.

Hey Ryan!

The student housing community I worked for required all tenants to have a minimum of 100K liability and you'd be surprised at how many times we had to use their policy for some sort of damage to the property (i.e. flooding, fires, etc.). I would strongly recommend requiring renter's insurance for your tenants. Without renter's insurance you’re putting yourself, your rental, and your savings at risk. Requiring renters insurance protects you from expensive renter accidents, injuries on your rental property, and costly lawsuits that can easily pop up in the landlord business.

Hope this helped! 

Renters insurance is a part of all my rental agreements and I just recently spoke with my PMs to make sure they are enforcing that clause for all tenants especially those with large dogs. Each PM has it's own clause ( different states) so I am assuming they are tailored accordingly, probably should check the monetary coverage levels.

@Katie Stewart How did the process of using the renter's insurance policy work? Did you try and get the students to pay for the damage first? 

I've never had to deal with extensive damage like this before but may have to in the future.

@Will Gaston I didn't directly deal with the process, but I'm pretty sure we would file the claim and the insurance company would pay for however much the renter was covered for. After the insurance company paid for the covered amount, we would charge the remaining amount to the tenant. 

@Ryan K.

Get the insurance implemented—It’s cheap, approx $150/year,  covers theft, fire started by tenants, water damage from leaving sinks or tubs running, etc. it’s good for all parties involved and you can be an additional insured.  Enforce it or offer to get it for them and show it as an additional charge in the lease. 

Even if you don't require it, ask your tenant--if you started a fire in my kitchen, my insurance will repair it. Then they'll sue the person at fault. Do you want to be on the hook for $20,000 for MY new kitchen or do you want your renters insurance to cover you for it? It's $10/mo MAX for a $300k liability policy. No brainer. 

As an insurance broker, I've had multiple investors' insurance policies go after the tenants after claims like these and I can't believe that more landlords don't require it.