Purchasing a renters policy for a tenant

6 Replies

I recently purchased a quadraplex with tenants in place.  The previous owner didn't require renters insurance and the tenants are not up for renewal for a few months.  Has anyone purchased a renters policy on behalf of their tenants?  Not sure it that's a thing, but trying to think outside the box to cover my basis until the leases are up for renewal. 

I think that the renters insurance needs to be in the name of the renter. You won't be able to get one for them. You can require that they get a policy when they sign your lease to rent from you.

Why would a landlord pay to insure a tenants belongings. Their belongings are not your concern.

At lease renewal insist that they have liability insurance. I require tennats have a minimum 1M liability insurance.

Thanks @Antoine Martel and @Thomas S.   I'm looking at getting renters policies to shore my liability for a tenant mishap that the tenant would otherwise be responsible for.   That way I would not be using my liability insurance but instead be using thiers.

Originally posted by @Thomas S. :

Why would a landlord pay to insure a tenants belongings.  

We do. 

We offer to pay for a minimal policy through a local insurance agent. The tenant must sign up for the policy themselves, as they are the ones insured, but we pay for it. The cost is miniscule - $45-75 per year. Yes, it does have a small amount of coverage for the tenant's belongings, but it also provides $100k in liability coverage. So if a tenant causes a fire, it goes against their policy, not ours.

The tenant has the option to get any policy they want, of course, but this is the one we pay for.

This solution may not work for you, with your rentals in your market, but it works for us.

@Sylvia B. I'm not sure that makes sense. You pay for insurance so a potential claim doesn't go against your insurance? Why not file the claim with your insurance and charge the tenant for the deductible? Keep in mind these liability claims are extremely rare.

I don't require renter insurance but I strongly recommend it. Some courts (and some states) have ruled it is illegal for a Landlord to force the tenant to purchase insurance. Even if you do require it, you have to track and enforce it. You can't evict them if they refuse.

It may be OK for a couple rentals but for anyone managing large numbers it's a real energy drain to protect you against something that is extremely rare. I just read this study that says less than .15% of all claims are injury related. In other words, there are more important things to worry about.

Originally posted by @Nathan G. :

@Sylvia B. I'm not sure that makes sense. You pay for insurance so a potential claim doesn't go against your insurance? Why not file the claim with your insurance and charge the tenant for the deductible? Keep in mind these liability claims are extremely rare.

 A claim for fire stays on your insurance record, causing your rates to go up, for 5 years. I can't charge the tenant for that.

We used to simply recommend that the tenant get insurance, but decided to require it after 3 tenant caused house fires in one year in our small town. (Not our houses.) It was the easiest way to transition existing tenants to the new policy. We will probably phase it out as we get new tenants, just requiring proof that they have a policy. 

We only have 12 houses,  and we've only been doing this 6 years, so we're still learning, still tweaking our processes. 

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