Should I have my tenants get renters insurance?

Question

Please read my post before you just say yes.

I just bought my first single-family house. This will be a house hack and I will rent out the three other rooms in the house. Each renter is a good friend of mine. I asked my agent what he thought and this was his response. "The insurance is tricky. You may want to call a couple local agents and talk through a couple options. Them getting renters insurance may change the type of insurance you have to carry. Might do you more harm than good." So if they live in the same house with me should I require them to get renters insurance?

Another question I have is what kind of things should I put on the lease agreement. If anyone could provide one they have done specifically for a house hack that would be wonderful. I've already written one up but I'm sure I've missed something.

Just wanted to hear some thoughts of someone who has done this before and knows more than I do. Thank you All!

Aaron Porter · Answer

You definitely want to have your "tenants" get their own renters policies. They are super cheap and a lifesaver if the tenant needs to make a claim. Your homeowners policy (yes it should be a homeowners policy because you will be living in the home, a Dwelling fire will not have enough coverage for contents among other provisions) will not cover your tenants property. they are tenants as they are not your dependents.

Most "owner managed" rentals that we write insurance for, the owners do a google search for a blanket renter/landlord agreement for their jurisdiction (state and maybe even city) You could have an attorney draft something but it usually isn't necessary anymore with how powerful the free information on the internet is.

make sure that your tenants include you as an additional insured on their renter's policy. That gives you extra protection in liability claims and it gives the tenant protection a better standing as it provides a unified front for legal litigation.

Chris Seveney · Answer

remember to always separate personal from business. so yes get them on a lease, I would reach out to someone on BP, an attorney or a PM to get a decent lease agreement. Regarding renters insurance, yes I would request they get it. What if a pipe breaks and there stuff is destroyed. Your insurance most likely would not cover them and relocating them would be on them

Nathan Gesner · Answer

I have never heard an insurance agent claim it would do more harm than good. On the other hand, there's not a lot of benefit since you have insurance and occupy the same space. The only thing the renters need to add is coverage for their personal belongings.

Jason Shamis · Answer

Sounds like you won't need liability insurance for tenants. I would normally say yes but since you are living there you will be carrying homeowners insurance and not a fire policy. The only issue you might run into is if they cause damage then you are stuck paying the deductible and or any increases associated with that claim.

Bjorn Ahlblad · Answer

@Zach Fulton welcome to BP! Renter's insurance is a must have for our properties.

Should I have my tenants get renters insurance?

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