Should I require renters insurance from tenants?

6 Replies

Is it wise to require my single family home tenant to carry renters insurance? If so, why?

On your contract indicating you have a property insurance and it does not cover tenant personal property. If there is a breakin your insurance will not be covered.

Yes, most people will recommend you require it and also state its requirement in the lease. Each year, they'd need to show you a proof of renewal. They need to understand that your property insurance does not cover their personal items if there is damage. If the tenant causes damage, their insurance can cover it, or at least your deductible on home insurance claims due to their own fault. There's lots of reasons to require it that helps take away some potential liability from you. State this requirement of insurance in your rental ads or at least the application so they know up front. On the day of lease signing, they would need to bring proof of the insurance as well as security deposit and first months rent. If they are missing any of those items, cancel the lease signing. Do not take their word for it when they say they'll pay at another time.

It costs my tenants around $10/month, or $120/yr. I️ require it. Thankfully never an issue so far. Seems to improve tenant quality as well.

Hi @Aaron Peterson ,

An absolutely must. It acts as another layer of protection for you. Example, a guest of your tenant trips and falls on your property, and sues you, your homeowner's policy would cover it. But wouldn't you rather them sue your tenant first and have their renter's insurance cover it? It then doesn't impact your premium or insurability. This is just one of many examples of loss you can avoid. (Theft, fire, etc) A typical renter's policy would cover water damage too, but that would have to be caused by an AC drain line clogging and overflowing.

The cost of renter's insurance is $150/year that is a cost the renter pays for. Make sure you require your tenant to put you down as a secondary insured. That way you're notified if the policy lapses or expires. 

Yes! Tom's tip about telling the tenant to put you as secondary insured on their policy is very important and very useful!

I'm an Ohio insurance agent and I see it all the time with my landlords who don't require the tenants to carry renters insurance have a beef when a minor situation happens - a lot of time when it's the tenants fault too. They start a fire yet expect you as the landlord to pay for their smoke damaged property. Or a tenant in another unit overflows a sink/tub and the tenant's below have wet property and expect the landlord to pay for it. Them paying an extra $10 to $15 a month fixes all that and more. Have yourself listed as secondary named insured also.

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