Renter's Insurance - Effect on Me

3 Replies

I read another thread stating that the landlord really can't be listed as additional insured on a renter's insurance policy for because they have no real loss to claim (in more insurance-esq terms).

Do I then have any incentive to obligate my tenants to purchasing a renter's insurance policy? Will it cover me or my property in any way as to prevent a loss claim against me or my insurance company?

My thought was to allow a discount of $x/month as long as the tenant has insurance, with rent minus x being the true rent I want. But if there is no benefit to me, I'll just advertise at rent minus x w/o the insurance rule.

In case it matters, this is an owner-occupied building.

There are many benefits to the landlord. Lots of blog and other articles on it. I would not offer a discount. This is unnecessary. If you require it then they will do it. Good tenants already have auto insurance and just add it with their current company. It is typically less than $15 a month. If an applicant comes along without any insurance, or does not want to get renters insurance, I would beware. 

If you don't require it there should be a clause in your lease either way regarding damage to their personal items etc. You will see this in almost all lease templates.

One way it helps landlords is when a pipe breaks and ruins their big screen TV and they call you to replace it, you can say "As stated in your lease, we are not responsible for your personal items. You will want to contact your insurance company."

Keep it simple.

@Matthew Olszak a tenants renters insurance will not provide coverage for you or your property directly. 

if they start a kitchen fire, your policy will pay for damages first.  Then, it is possible, for your insurance company to go after the Renters insurance policy for the claim amount.

Also, in IL, a landlord can be added as Additional Interest on the policy, not Additional Insured.  

You don't want Additional Insured on the renter's policy. You want Additional Interest. This gives you the notices of the policy, but causes no problem in case of a claim. I mandate this for my tenants.

Their policy will cover things they cause: fire from stove error, water damage from leaving tub on, suit because their drunk friend fell and broke his head on the toilet, etc. Plus, they get to know their belongings are covered if a pipe bursts and the place floods (your insurance for the pipe, theirs for their belongings and the hotel while it's fixed) or if they are robbed.

As a landlord, there is no con to requiring this policy. As a tenant, it is $5-$15/month, which is not a problem. If it is, they're not a good choice.

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