Should landlord pay tenant renters insurance?

Question

Im told that tenant should be required to carry renters insurance but most cancel after a few payments Ive heard. Should you just increase the rent by the extra 20 dollars or so to new tenants monthly rent or resigning tenants rent when they sign the lease? Is this a bad idea?

Meghan McCallum · Answer

Put it in your lease that they need to carry it and maintain it, also have them get the additional food rider. (I'm not sure what it's called but it will reimburse them for food if something goes wrong like a leak into a pantry or the power going out). Trust me, you will have a happier, more educated renter if you do. The rider is a few dollars more and most people really need it when something goes wrong.

Kurt K. · Answer

@Priscilla Davenport I would totally agree with what @Michael Karl said. It is not mandatory but an recommended option for the renter and by no means don't pay for your renters insurance. You are already insured.

Jake Hottenrott · Answer

@Priscilla Davenport in my Allstate Agency, we work with a lot of apartment complexes and landlords to make sure that their tenants have renter's insurance.  We list the complex/landlord as an interested party so that if the policy is cancelled, they are informed of this action.  The rental insurance amount can vary based on credit/prior losses/value of possessions so I make each tenant have their own policy in place.

@Michael Karl, I'll professionally disagree that it will not affect @Priscilla Davenport if her tenants do not have insurance and she is adequately protected with her insurance.  While I agree she should not collect/pay for tenant's insurance, she should require it.  There are a multitude of situations that can cause landlords headaches if renter's insurance is not maintained by tenants.  If your property catches fire due to no fault of the tenant and their personal property is destroyed, where will the tenant turn to replace that property, you the landlord (headache).  If they cause bodily harm/property damage/loss to a neighbor/neighbor's property then the renter's insurance will step up and pay.  If there is no renter's insurance, the determination of liability can be pointed at both tenant and landlord and left to courts/lawyers to try to decide to cover the losses (headache).  The renter's policy will cover personal losses above the deductible, provide liability coverage and possibly save your renter on their auto insurance.  Protecting your tenant's assets and cash flow is a good business decision for yourself and for them (even if they don't realize it).

@Meghan McCallum that coverage for spoilage of food in the freezer/refrigerator due to a power outage is included in our Allstate policies in Illinois without a special rider, the caveat is that the deductible must be satisfied first before insurance pays so make sure your tenants don't pick the highest possible deductible to lower their monthly payment.  Other states and insurers can be different, so of course work with a referral partner to make sure you have an understanding of the policy you recommend to your tenant and make sure that they are offering the right coverages.

Michael Karl · Answer

@Priscilla Davenport, not sure why you would need to pay for your tenants renters insurance?  As long as you have adequate insurance for yourself and your rental property then it will not effect you if your tenant has insurance or not.  It is a good practice to encourage your tenants to get insurance to protect their own personal belongings if something were to happen.  But I would say it is not your responsibility to pay for it or even to collect the money and make the payment on your tenants behalf.

Should landlord pay tenant renters insurance?

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