Do you require tenant's to buy renter's insurance?

General Landlording & Rental Properties
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Do you require tenant's to buy renter's insurance?

James Barnhart
Rental Property Investor · Ocala, FL · Member since 2016 · 226 posts · 140 votes

I have seen this requirement on some property mgmt. websites.  My insurance agent recommends that I require it.

I always have recommended it to new tenants, but none ever have bought it, to my knowledge.

What are your thoughts?

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JD MartinBusiness Member
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Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
9y

Unless you are prepared to take action if they don't get it, and/or cancel it, I wouldn't bother. Action means that you will take failure to ensure as grounds for eviction. Keeping up with who has and has not kept up their renters insurance and evicting those who failed to get it, or keep it, would be nothing short of aggravating. We recommend it and leave it at that, and maintain our own good insurance policies. If a place burns down or is hit by a meteorite, and they lose all their stuff because they didn't have renter's insurance, oh well. 

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  • Account Closed
    Insurance Agent · Member since 2015 · 191 posts · 124 votes
    9y

    http://www.bornmanagement.com/Top-10-Reasons-Landlords-Should-Require-Tenants-To-Carry-Renters-Insurance 

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  • Mags S.
    Rental Property Investor · Phila, PA · Member since 2015 · 276 posts · 111 votes
    9y

    Yes I require tenants to carry renters insurance. My ins guy suggested 300k.  Based on some readings here, I also require the tenant's insurance policy to carry me/owner as addl'l insured (free).  Tenant got the space they wanted, I got the extra protection - win, win 

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  • Anthony Griffin
    Rental Property Investor · Jackson, MS · Member since 2014 · 21 posts · 11 votes
    9y

    Absolutely.........

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  • Lynn McGeein
    Real Estate Agent · Virginia Beach, VA · Member since 2012 · 2k+ posts · 1k+ votes
    9y

    Yes, minimum 100K liability with me as additional insured; 300K minimum if they have a pet.   Must have copy of policy before possession, along with proof of utility transfers.  

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  • Michael Noto
    Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
    9y

    We require all of our tenants here in CT to have renters insurance.

    I try and tell my clients that it is a good idea for them to do the same.  Not many do though.  

    To me it is an easy conversation to have with a tenant:

    "We require renters insurance because our insurance covers the building, not your personal items."  

    When you tell them it is a minimal cost and then they actually look into it for themselves, we have never had a tenant balk at getting it.

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  • Kristopher HanksPro Member
    Rental Property Investor · Davenport, FL · Member since 2016 · 593 posts · 382 votes
    9y

    @James Barnhart I give them a form that asks if they are going to get it or not. If so it has a space for them to give me their insurance information. I also give them a pamphlet that covers why renters insurance is important. I have low income renters so I struggled with making it a requirement. Obviously the safe answer is always require it. I decided to go this route because I need my rentals to be affordable to keep them occupied. The information tells them that my insurance will not cover the loss of their items. You can do a Google search and find this info online and pass it along to your renters. 

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  • Justin Fox
    Software Developer · Vidor, TX · Member since 2015 · 922 posts · 639 votes
    9y

    I don't even have contents insured on my own home, so no I don't require it.  I suggest it in my lease and inform them that the insurance on the property is only dwelling, so their contents are not covered.

    I recently switched to a different HOI provider because they wouldn't insure my contents for anything less than 70,000.  70,000?!  I was confused because I didn't know which rich person they thought I was.

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  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    9y

    Unless you are prepared to take action if they don't get it, and/or cancel it, I wouldn't bother. Action means that you will take failure to ensure as grounds for eviction. Keeping up with who has and has not kept up their renters insurance and evicting those who failed to get it, or keep it, would be nothing short of aggravating. We recommend it and leave it at that, and maintain our own good insurance policies. If a place burns down or is hit by a meteorite, and they lose all their stuff because they didn't have renter's insurance, oh well. 

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  • Kim Meredith HamptonBusiness Member
    Real Estate Broker · St Petersburg · Member since 2014 · 2k+ posts · 2k+ votes
    9y

    I put it in renters criteria. They can purchase from us, or must provide with a copy of their policy and my company named as additional insured. It really is more for the benefit of the owner, but takes care of their items as well; fire flood etc... This would be a second line of defense for the owner. 

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  • Adam Bonoff
    Investor · Easton, CT · Member since 2016 · 14 posts · 4 votes
    9y

    It makes sense to require it making yourself or your company a named insured.  For usually around 150 per year you are getting yourself potentially another 3-4000 of security, if they were to damage the property.  If you put it in the lease and demand a copy of the DEC page before they move in you will get it done.  Nothing is a problem until its a problem.

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  • Kurt K.
    Rental Property Investor · Phoenix AZ / Kendallville, IN · Member since 2016 · 293 posts · 149 votes
    9y

    I wouldn't mandate it but let them know that you recommend it. If the unit floods or there is a fire and all of there personal items are lost, its their fault if they don't have it. You might make them aware of this.

    Its a personal decision on the renters part and doesn't impact the unit because that is insured by the property owner.

    2Reply
  • Amy Beth
    Rental Property Investor · Edison, NJ · Member since 2016 · 753 posts · 565 votes
    9y
    We require tenants to have renters insurance which covers their pets. We do not turn over the keys until the tenant(s) provide documentation of having the coverage.
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  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    9y

    Yes, I require it for liability coverage, 1M minimum. I don't care if they have content coverage, that is their problem.

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  • Anthony Lee
    Insurance Agent · West Long Branch · Member since 2015 · 206 posts · 64 votes
    9y

    @James Barnhart You as the owner of the property should be listed as an "Additional Interest" not an "Additional Insured" on your tenant's Renter's Insurance Policy. As an "Additional Interest" you will be entitled to receive evidence that the insurance is in force as well as any notices of non-payment or cancelation. 

    If you are listed as an "Additional Insured" rather than an "Additional Interest" this may actually cause significant problems in the event of a loss. As it would then become a matter of insured vs insured which most policies have a clause which significantly limits coverage in this situation. For example, Your tenant causes a loss which they are liable for, as an "Additional Insured" that loss has just become your loss as well and may impact your future insurability and/or rates as the landlord. 

    1Reply
  • Anthony Lee
    Insurance Agent · West Long Branch · Member since 2015 · 206 posts · 64 votes
    9y

    @Kristopher Hanks @Kurt K. Renter's Insurance provides important liability protection as well, not just personal property. e.g. if the tenant causes a kitchen fire which damages your building, you're insurance policy will likely be able to subrogate against the tenant's renters liability insurance as they may be liable for the damage. Generally if the carrier is able to subrogate, the claim, although put in by you, will affect you significantly less than if they were unable to subrogate.

    @Justin Fox You should definitley carry coverage for your contents in your own home. Generally contents coverage, loss of use, etc, on a home owners policy are based on percentages of your Coverage A, or dwelling coverage. There are carriers which will allow you to pick and choose the limits you would like.

    @JD Martin As you mentioned if they loose their stuff because they didn't have it, oh well. But what if they start a fire or something happens which they are liable for and it causes damage to the building which you in turn must file a claim to fix. Are you willing to risk your insurability and your insurance premiums increase for something that the tenant caused? 

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  • Anthony Lee
    Insurance Agent · West Long Branch · Member since 2015 · 206 posts · 64 votes
    9y

    @Amy Beth It's good that you require that the tenant's have renters insurance. Especially if they have pets. However, it is important to note that policies will vary as to how pets and animal liability coverage is handles. Most policies, have an animal liability exclusion. It sounds like it would be important for you to check to make sure their policies do not have such exclusion. 

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  • Mags S.
    Rental Property Investor · Phila, PA · Member since 2015 · 276 posts · 111 votes
    9y

    @Anthony Lee  thanks for that distinction.  I'll bring it up to my ins guy who is also an investor. I wanted to be named mainly for liability reasons. Property is in a very litigious city.

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  • Adam Bonoff
    Investor · Easton, CT · Member since 2016 · 14 posts · 4 votes
    9y

    I just looked at one of the policies and Anthony Lee is correct, I have a Liberty Mutual agent I referred to the tenants and he named my company as having additional interest, I thought I was an additional insured.

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  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    9y

    Anthony Lee: in short, yes. That's why I have good insurance. The idea that I am going to depend on my tenant to give me some extra protection is a joke. Again, it comes back to your remedy if they don't keep it up. If you aren't prepared to evict someone who lets it lapse, what other remedy do you have? How many tenant friendly states are going to let you evict a tenant without insurance?

    This doesn't just go for renting houses. How many of you storage unit owners require it for people storing their stuff there? How about all the AirBnB crowd?

    Don't get me wrong - if the tenant has insurance, that's great. I find it far more burdensome to enforce than the nominal value to me. Your own situation may be different.

    Never have anything in your lease you aren't prepared to enforce.

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  • Max T.
    Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes
    9y

    I have it written that way in the lease but I do not enforce compliance. It is there for the protection of their property. If something were to happen and they were to try and come after me I can point to my lease and say "told you so."

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  • Account Closed
    Investor · Denver, CO · Member since 2016 · 736 posts · 582 votes
    9y

    I require it on the lease.  There is no real way to enforce it (they can get it then cancel it) but it is an effective paper trail if something happens an I have to go after a tenant for damages that should have been covered under a policy.

    0Reply
  • Mark H.
    Richmond, VA · Member since 2016 · 215 posts · 129 votes
    9y

    When we were relocating three years back, we had a six month lease in a large local apartment complex.  They required a renters policy and to be listed as an additional interest.  Since we still had our homeowners policy at the time, our agent said we didn't need the separate policy and listed them as an additional interest to the current policy.  In the process of selling/buying, the policy on our old house "lapsed", but was within the 30-day grace period.  They then re-wrote it into the new house policy with the apartment complex still listed, but in the middle of it, the apartment complex received a notice and we were asked about it.  Explained what was happening with the policy, but not sure if they would have tossed us out had the answer been different.

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  • Kurt K.
    Rental Property Investor · Phoenix AZ / Kendallville, IN · Member since 2016 · 293 posts · 149 votes
    9y

    This is in our lease where the tenant has to initial it during the signing of the lease.

    _____ I have renters insurance coverage

    Insurance Company _________________

    Policy Number ______________________

    Expiration Date ______________________

    ______ I reject and do not have any renters insurance coverage in place. I understand that the property's insurance coverage does not and cannot protect my personal belonging against burglary, vandalism, fire, smoke and other perils which are covered by renters insurance. I understand that I am accepting all liability on this property during the tenure of my lease and I fully understand the options stated above and have indicated so by my initials.

    1Reply
  • Derek Lacy
    Insurance Agent · Maitland, FL · Member since 2015 · 397 posts · 244 votes
    9y
    This comes up too much. The perils covered by a standard renters policy are fire, smoke, and explosion. Anything else, like run the tub over, etc. no coverage. On the additional interest/additional insured. If their dog bites another person, you'll really wish you were additional insured, or your landlord policy will be a co-primary insurer, meaning you both have the claim. Whereas additional insured would place the tenant liability as primary. There is no co-insured concern as section II conditions B states that each insured is treated individually. And their claim would not show up on the landlord's claim report as they were an additional insured, not named insured.
    1Reply
  • Chuy Gonzalez
    Investor · Long Beach, CA · Member since 2012 · 313 posts · 190 votes
    9y

    Nope.

    0Reply
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