Should I require Renters insurance?

Question

Hello, I have been working on 6 unit new construction apartment and we should be finished in one to two months. We will have building insurance but I would like some inputs on if I should make Tenant insurance optional or Mandatory. Would love input on pros and cons of having Tenant insurance required by tenants.

Thank You.

Nathan Gesner · Answer

You can require it but it's a personal choice. It's not easy to scale, particularly for someone with dozens or hundreds of rentals. I manage over 300 units and own 20 but I don't require it. Can you imagine the amount of effort required to track insurance? Can you imagine trying to evict a tenant for failing to maintain insurance or refusing to pay the $10 each month for the policy you are forcing them to carry? It won't happen.

Greg M. · Answer

I absolutely require it and they don't move in until they provide proof of coverage and if it lapses, I will buy it for them and bill them. It's cheap ($10/month) and provides a ton of protection for both you and the tenant. I require a minimum of $100,000 in liability coverage and I don't care if they insure anything else.   You want to be added as an Additional Interest (not Additional Insured) to the policy. These are very different things.

Dennis M. · Answer

In low income areas you’ll never get any tenants by forcing them to get insurance . Most of us understand the value of good coverage but people in tough areas see it as a burdensome expense and will simply go down the road and stay at another landlords property who doesn’t . Forcing people to buy insurance is something I don’t do . I sure didn’t like it when the last administration did it to me on healthcare , so I don’t force that on others .

Terrell Garren · Answer

Here's an odd angle on this.  I volunteer with the Red Cross on a Disaster Action Team. We get dispatched from the City and County fire departments for all house and apartment fires.  Our job is to provide immediate assistance E.g. blankets, money for clothing, food, lodging and longer term counseling for getting their lives back in order.  I've no experience to offer as a property owner but I can tell you a fire or flood is devastating for people with no insurance.  Make it mandatory for their own good if nothing else.

Anthony Dooley · Answer

@Tommy Kim I do not require it. I attempt to educate them, for about 5 minutes, on the importance of having it, but it's on them. I don't understand why you would require it, but it is a smart buy.

Connie Chan · Answer

I agree with Nathan that it's a personal choice and hard to scale and enforce over time. You can definitely try asking, and I think there's no downside to asking (other than turning off some tenants), but if you're scaling to a lot of homes, Nathan is right that it's hard to track. You might want to have some suggestions handy to recommend to tenants, I have mentioned Lemonade to some tenants before and they find it easy to use. Lemonade is a mobile app that lets renters buy renters insurance for often times less than $10 a month. I think the younger tenants find it a lot easier to use than traditional insurance companies.

Michele Fischer · Answer

We like to put it in the agreement as recommended, and explain to them what we cover if there is a disaster.  But we do not require it.  We can point out the risk, but adults can decide what to do about it.

Our clause:

Insurance: Tenant should obtain a renters’ policy of insurance on their personal property.  The tenant understands that the property of the Tenant is not insured by the landlord for damage or loss of any kind (action of third party, fire, water, theft, vandalism, storm, heat or cold, electrical damage, pests, mold, accident, etc.), and the Landlord assumes no liability for such loss.  Landlord will promptly respond to Tenant request for repairs but will not be monetarily responsible for tenant disruptions or inconveniences during habitable times of repairs or tenant/guest injuries incurred in or around obvious areas of maintenance, repairs, or construction.

Joshuam R. · Answer

This here is gold point of view. Thank you for sharing! I now required them to have.

Tommy Kim · Answer

Thank you so much for all your perspective and comments.   It give me great idea on different perspective on requiring and not requiring tenant insurance and about scaling.

Should I require Renters insurance?

Most Popular Reply