Renter's Insurance ???

Question

Hi! Do any of you require your tenants to have Renter's Insurance?

Frank Chin · Answer

It's a good thing to have and runs about $150.00/year.

As it runs about $10-$15/month, build it into the rent and offer to pay it for the tenant. There's a one page addendum in my lease that's goes into what renter's insurance covers that landlord  insurance doesn't. But by putting it this way, they often get it on their own. I do it this way in NYC because you can't require it in NYC. There was a report on an apartment fire here, over 20 tenants became homeless, and the newspaper lamented that was because no one had renters insurance.

Just to mention your tenant will sue you for negligence in the absence of such insurance. One sued for $1,500, his reported lost for a burglary, due to the lack of security in my building. My attorney advised settling it is cheaper than fighting it in court. Having my landlord insurance cover would just run my premiums up and risking cancellation, especially if I file too many such claims.

Kevin Hoag · Answer

Hey @Aram Velazquez I think it is wise to make your renters carry a policy. This is however depend on the area you are investing in. Here in Cleveland your unit will stay empty if you demand renters insurance. The larger apartment complexes all require it. For your SFH and Multis it is really hard to enforce and track. They can buy it, move in and then 2 months later cancel the policy or stop paying for it and at that point are you going to spend them money to evict them?

David Gross · Answer

I do in my lease but I don't make them prove it. Mostly, I want to be sure that they understand that my insurance does not protect them.

Frank Chin · Answer

To add to what Ken said, I once had a renter signing the lease, agreed to renter's insurance, showed me proof he paid for it, showed me the certificate of insurance, then cancelled it afterwards to get the refund. Then one day he left his window open, a heavy rainstorm came by, thousands of dollars of his property got damaged. So he had the nerve to come after me.

I was shocked and said "you bought insurance, didn't you?". Then he told me he cancelled it. I reminded him in that case, "you violated the lease", and I have grounds for eviction. He backed off.

My insurance agent advised me in the future to have myself named as an additional insured on the renter's policy so I will be notified when the policy got cancelled. That's the standard way it's handled around here.

Jay Thomas · Answer

Landlords recommend tenants to get renter's insurance, though it's not a must. This insurance shields tenants' stuff from problems like fire, theft, or damage, and it covers accidents too. Some policies even help with temporary housing if the rental gets damaged. Landlords like it because it lowers their risk, helps with repairs, and shows they've got responsible renters.

JD Martin · Answer

Unless you're going to enforce it being carried without cancellation/lapsing, don't bother. It's a good idea but it's like anything else in a lease - you have to be prepared to evict if they don't carry/keep it. We don't bother; I keep my own great insurance, and let the insurance company worry about abrogating their damages against the tenant who doesn't bother carrying the insurance.

Kristen H. · Answer

@Frank Chin

Hi Frank,

Do you just open a policy through your insurance and add the tenants? Do you need to collect specific information about the tenant for the policy? Every tenant is different, how would you know how much insurance they would want or do you just do a "base" amount so they have basic coverage ?

I like the idea of including it in the rent as it ensures the tenant keeps the renters insurance and seems like the least amount of effort

Thanks!

Account Closed · Answer

I use Cozy.com for rent collection. This automates the process and the tenant is required to show renters insurance in order to pay rent through their website.

Naftali Tolibas · Answer

Aram,

Haha I had the same exact question a few days ago. The majority on my post said that they required renters insurance on their leases.

Jon A. · Answer

I have it written in my lease that it is required but I don't enforce it. It is really up to them if they want their property covered or not. Your insurance as a landlord only covers the house itself and not what it is inside of it. A good example is a case of something like a fire and the tenant looks at you to put them up in a hotel or another rental for the months that it takes to remedy the damage. Their renters insurance should cover that. Your homeowners insurance won't. Your tenants need to understand that your insurance does not cover their belongings and your lease requires them to have it. If they choose not to get it, that is their choice. But, if an upstairs toilet leaks on their bed, you are not going to replace it, that is what renters insurance is for.

Renter's Insurance ???

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