Pets & Required Renter's Policy

[Susan H.]

In the “you might have similar questions” category: Since my tenants of 3+ years are moving out this summer, I checked with my insurance agent to clarify the rules/restrictions about dogs in rentals. My agent (with Allstate) says their policies exclude any dog with a known bite history, but no specific breed restrictions.

The agent strongly encouraged me to require tenants to carry their own renter’s policy that includes a minimum $200,000 liability. (The property is in Fayetteville, Arkansas; recommended amounts may vary by location.) I checked my current lease and realized I need to edit for more specific (blunt) language to stipulate they must carry renter’s insurance with liability.

And to ensure the policy stays in effect, the agent suggests that I require the tenant to list me as an "additional interested party". With this designation, you will receive documents related to the status of the policy and it's renewal directly from the insurance company. I didn't know this when I rented the SFH to my current (and first) tenants.

Now to my own questions: can I require tenants to have such a policy from day 1 of the lease? Is that even possible, or will they need a signed lease to get the policy? If so, do you suggest they sign before the start date, or should I give them xx days to get the policy? I’m reluctant to accept a tenant with dogs without that policy, but it’s quite possible I’m worrying for no good reason.

I expect everyone on BP to be more experienced than I, so opinions please!

~Susan

[Kevin Romines]

Mandate the renters policy especially in the case of pets. This protects them as well as an additional layer of protection for you. I would go a few steps further than your agent suggested. You need to be listed as an additional insured. This insures you as it insures them. That includes legal defense fees to be paid by their insurance carrier. You also need to be listed as a certificate holder. This will notify you if there is ever a termination, cancellation or lapse in the policy. As for me, I would require liability coverage of 500K or more.....To go from one liability level to the a higher one is very inexpensive.......and remember, this is what protects them as well as you.

If you feel strongly enough about it and don't want to take the chance the renter will flake on this down the road, then build the cost of the policy into the rents. You pay for the policy out of the increased rents and that ends the question of will they keep it maintained? You will be in charge of paying that from your increased rents.

However, the tenant is still required to sign the application is it will be in their name (they can refuse, but if they do, they are not the tenant you want). They are still the owner, so they can make changes, you are just the bill payer and the additional insured / certificate holder. But hey, why would they cancel the policy if your paying for it according to the rental agreement?