Renters insurance requirement??

Question

James Wise · Answer

As a landlord your property insurance will cover you if there are serious damages to your property, renters insurance will not. The reason you want to require, or at least strongly recommend that your tenants get renters insurance is to cover yourself of any liability in the event a tenant comes to you trying to get you to pay for items they had that were damaged or stolen.

• Tenant: "The basement flooded and my items were ruined. You owe me $2,500!"
• Landlord: "Sorry to hear that. If you refer to page three of your signed lease you will see that tenants are required to get renters insurance when living in one of my properties as it explicitly states that I am not responsible for damage to a tenant's personal belongings." 
• Tenant: "Someone broke into my car last night and stole my stereo. You owe me $900!"
• Landlord: "Sorry to hear that. If you refer to page three of your signed lease you will see that tenants are required to get renters insurance when living in one of my properties as it explicitly states that I am not responsible for damage to a tenant's personal belongings."
• Tenant: "One of the other tenants stole my clothes out of the laundry room. You owe me $500!"
• Landlord: "Sorry to hear that. If you refer to page three of your signed lease you will see that tenants are required to get renters insurance when living in one of my properties as it explicitly states that I am not responsible for damage to a tenant's personal belongings."

Atwan Kwan · Answer

REQUIRE the renter's insurance. I NEVER thought anything would happen even though I was requiring already....

Lo and Behold, tenant causes an oven fire, says "I have no idea how the inside of the oven caught on fire while we were cooking"....

Restoration companies are called to come in..... tenant who burned our kitchen is pregnant and is asking for a hotel.....

Total cost for a smoky oven and smelly kitchen? +$30k!!!!! out of the blue......

The restoration companies is the biggest SCAM and there's really nothing anybody does about it.....

So even though, we're doing everything right.... you DON'T want to be caught UNPREPARED when the bill comes.....

Account Closed · Answer

The trend for landlords to require their tenants have renter's insurance is a new one.  So, for eons, landlords have survived just fine without being able to rely on their tenants' insurance.  So, you can calm down.

Your insurance covers your property.  Even if your tenants don't have insurance your insurance company can try and get money out of.  You'd have to pay your own deductible, and yes, your premiums would probably go up.

If the tenant was at fault, you could sue them for your out-of-pocket losses not covered by your insurance company.  And then try to collect lol.

What I'd do if I was you, is get a deductible you'd really be okay with having to pay our of pocket.  And when your tenants' leases are up, you can require insurance, if you like.  I would say it's required, and you have to be listed as someone who gets notified if their insurance lapses, and if it does, you can give them a notice to cure or quit.

But, really, it's my opinion you need to rely on your own insurance.  I'm trying to picture a scenario where you can actually prove a tenant was at fault.  And even then, let the insurance companies duke it out.

Kevin Romines · Answer

Virtually all the larger apartment complex's in the metro areas require their tenants to get renters insurance and list the company as a certificate holder. They do this because in the event of a liability claim, that tenant has coverage and it lessens the risk of that claim hitting the apartment owners policy and driving up their premiums.

As a landlord, I would require my tenants to have a renters policy with a min. of 500K in liability coverage. Liability is cheap, so going to 500K doesn't add that much? I would also require the tenant to list me as an additional insured and a certificate holder. As an additional insured, I would be covered just as they would be on the policy. That includes legal defense costs.

You can as the landlord, build the cost of the policy into the rents and require it in that way. You would be the payer of the policy and they would be the owner. If you do that, they would still have to agree to sign the application, but why wouldn't they, it covers their contents and gives them liability protection?

Eli Pluzynski · Answer

Ryan S. If there current lease doesn't require it there is no way to force them to obtain it. When their current lease is up I would recommend them signing a new lease with an insurance requirement in it. Make sure to include language that states that if they don't purchase the required insurance and provide proof to you before their new lease start date there is a defined additional monthly fee that they will owe.  If they start a fire, cause a flood, etc, they would be responsible for damage they caused, but do you think you could actually collect it from them?  I would recommend contacting your insurance agent and check if it is possible in your state to purchase the coverage yourself.  It shouldn't be much and the peace of mind is well worth it. I have done that for properties in Florida. Our lease included language that allowed us to charge them an additional fee if we had to put insurance in place to cover them.

Todd Plambeck · Answer

The liability portion of their renters insurance should pay for it if they are at fault.

Nancy Curran · Answer

Even if they start a flood and your property is damaged, would their renters insurance cover your property?

Renters insurance requirement??

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