Does Landlord Insurance policy requires tenant screening?

Question

I'm in the process of getting a landlord insurance policy quote. The rep on the phone says their landlord policy doesn't require a landlord to screen tenants. I'm a bit surprised - if I were the underwriter I would see both the landlord and tenants as a higher risk if there's no screening. I come from a jurisdiction where you claim can be declined if you fail to show proof of tenant screening documentation especially for property damage by the tenant. In your experience, is it common that tenant screening is not required by a landlord policy offered in the US/Colorado?

Mike Montague · Answer

Proper tenant screening is probably the number 1 most important activity that a landlord/lessor can do.  The quality of the people that you allow to live in your property directly impacts your monthly profit and also will arise when the relationship ends.  Will they respect their obligations when they move out or will they stick you with a large bill for unpaid water bills, damages beyond the deposit and extraordinary cleanup expenses?

Requiring renter's insurance (separate from your property insurance) is also very important since they typically would not have the cash reserves to pay for a major damage such as water damage, ruined floors, fire/smoke damage, and you will be sued by 3rd parties if something happens to them while at the house if they have to go to the ER.

J Zhang · Answer

I have no doubt as to the value of tenant screening. I have since check with two insurance carriers in Colorado and they don't require tenant screening. The catch is they also don't cover intentional damage by tenant to the property.

Tim Baldwin · Answer

You need to screen using professional standards for several reasons.

Sandra Youkhana · Answer

I would definitely recommend screening tenants as a standard practice for your own protection, regardless of whether the insurer requires it. It's important to thoroughly vet potential tenants to ensure that they are reliable and will take good care of your property.