Renter's insurance - ? required

10 Replies

Hi everyone, I recently closed on my first SFR in South Bend around the holidays. Trying to get everything setup including a tenant. I'm using Cozy.co and it seems to be a fairly easy and user friendly site to use. It allows me the option to require the renter to get Renter's insurance. Wanted to get other peoples opinion regarding this.

Do you require your renters to get this insurance either for a SFR or MFH?

If not, what specific language do you use in your lease to defer the liability?

Thank you!

Hello @Vishal Didwania !

I do not require renters to get renters insurance, but I specifically state that it is HIGHLY RECOMMENDED. Also make sure to note that the insurance you have on your rental will most likely not cover the tenants' personal belongings (hence the need for renters insurance).

Hope this helps!

The most common use of renter's insurance is for the tenant's personal property (food spoiled in a dead fridge, $5000 sofa ruined by a leaky pipe, everything lost in a fire, etc). 

Beyond that most policies provide some level of liability coverage if a tenant's guest or anyone else is injured due to the tenant's negligence and some may even provide coverage if the tenant damages your property.

Regardless, I mandate in my leases that tenants carry renters insurance not only for their protection but for MINE. Let's say a tenant falls asleep smoking, starts a fire, and another tenant dies as a result. As a landlord I prefer not to be the only guy in the court room with a liability policy.

I found this to be a good read: 6 Good Reasons To Get Renter's Insurance | Investopedia https://www.investopedia.com/articles/personal-finance/082714/6-good-reasons-get-renters-insurance.asp#ixzz5592o9B34

I hope things work out for you ...continued success.

@Marcin C. @Ryan Murdock @Andre Simon thank you for the feedback. I agree that I would love to have the tenant get renter's insurance and everything I've read supports that. i guess i wasn't sure if the south bend market supports it. the SFR in probably a B- neighborhood but most of the other area is C/C+. For those of you having properties in a C class neighborhood have you had success with tenants getting a renter's insurance or opted for having language in the lease deferring the liability?

Originally posted by @Vishal Didwania :

@Marcin C. @Ryan Murdock @Andre Simon thank you for the feedback. I agree that I would love to have the tenant get renter's insurance and everything I've read supports that. i guess i wasn't sure if the south bend market supports it. the SFR in probably a B- neighborhood but most of the other area is C/C+. For those of you having properties in a C class neighborhood have you had success with tenants getting a renter's insurance or opted for having language in the lease deferring the liability?

Extremely tough to get C class tenants to buy renter's insurance. I still keep the language in my lease but I'd be surprised if any of those ones have it.  I mentioned I wouldn't want to be the only guy in the court room with a liability policy but if I am I can assure you it's a very good one. 

Contact Steve Eslinger office. Local Attorney on the REIA board. He has investment property and a tight lease. I️ had to scale back on a few things it was so comprehensive.

I would encourage having tenants carry renters insurance based on the math. A renter can get a policy for very little monthly or annually and can be covered for most personal belongings. On the off chance the place burns down randomly with no at fault, you wouldn't want a renter on the street with nothing. They may try to come after you to replace their belongings if they don't have coverage.

We require our tenants to have renter’s insurance.

@Ryan Murdock - thanks. I agree. I'll try to figure out a good language for the lease that minimizes my liability as much as possible.

@Shawn Pottschmidt - thank you for the tip. I will reach out to him. Good to see that he is local. I will reach out to him. 

@Danny Randazzo - i agree. just wasn't sure i could actually force anyone to get it especially in the South Bend rental market. 

@Amy Beth - what rental market are you in? is it C class? what are your typical monthly rents for a 2 bd/1 ba where the tenants are paying for their renter insurance?

Thank you all for the feedback!

I am in a class B neighborhood. It is SFH and we require it because we allow pets and we require it as extra protection in the event of a dog bite. I think in a C neighborhood it is even more important because tenants will not be able to afford replacing their personal property in the event of a fire or leaky pipe or some other problem and they will expect the landlord to cover it. Tenants in a C neighborhood may be unfamiliar with it but because the price is low I don’t necessarily think it would keep someone from applying if they like what you have to offer with your properties and price.

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