according to forbes, many renters don’t think they need renters insurance. they either underestimate the value of their possessions or have the misconception that the owner is responsible for their belongings and do not believe they need them. Requiring a renter to have renters insurance can protect them in the event their property is damaged or stolen. Replacing even a small amount of lost property can cost thousands of dollars, and the last thing you want is for your tenants to have an additional, unexpected expense.
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If you’re not sure if renters insurance is required for your tenants, read on to learn about the top benefits of renters insurance for both homeowners and renters.
can a landlord require renters insurance?
According to Zillow, landlords can require renters insurance as the term of a new lease or lease renewal. We recommend that you check with your state and local laws before adding a clause requiring renters insurance to your lease.
what does renters insurance cover?
Like homeowners insurance, renters insurance can cover the cost of replacing personal belongings (such as a computer, television, furniture, or bicycle) if they are damaged, destroyed, or stolen. . buildings or structures would be covered by homeowner’s insurance, but findlaw notes that homeowner’s insurance generally does not cover renter’s property losses.
according to nolo, renters insurance may cover:
- loss due to theft,
- negligent destruction of tenant or landlord property,
- injury liability, and
- natural disasters.
why landlords should require renters insurance
help with relocation costs
Depending on the state you live in (for example, California), you may be responsible for the cost of relocating a tenant in the event of a fire or other natural disaster. Even if state law doesn’t require it, you may feel obligated to help your tenants, all while dealing with damage to your own property. Zillow says many renters policies offer temporary cost of living if a renter needs to move due to damage.
reduces the risk of a lawsuit
according to nolo, the owner’s liability policy may not cover a tenant if the property is damaged or someone is injured due to the tenant’s carelessness. Renters can benefit from getting renters insurance as it protects their personal property from damage or loss and covers their personal liability if someone is injured while on the property.
protects you in case of property damage
rentprep notes that if a fire or other accident (through no fault of the tenant) causes damage to a tenant’s property and they have no other recourse to cover the loss, they can sue the tenant for damages. Your own insurance probably won’t cover a renter’s personal property in such cases, but renters insurance might. Requiring renters insurance gives you peace of mind that your tenants have a recourse to recover losses.
allows you to accept pets
since 68% of us. uu. households own a pet, pet-friendly owners have a broader pool of applicants to select from. Renters insurance can help mitigate pet risks with dog bite and property damage liability coverage. Canine Journal notes that coverage can depend on the state, type of animal, and insurance company. If renters insurance is your only basis for allowing pets, you may want to make sure your renters policies cover pet liability.
reduce the possibility of an increase in insurance premiums
zillow reports that a homeowner’s insurance premiums may increase after a claim or be canceled instead of renewed if there are too many claims. If a renter has renters insurance that may cover all or part of a loss, they can potentially reduce the chance of their own premiums going up.
Although there are certainly advantages to requiring renters insurance, you still want to carefully evaluate who you allow onto your property. Renters insurance can help minimize your renter’s risk, but one of the best ways to minimize your risk is to find renters who pay rent on time and respect your property. smartmove gives you detailed information and leasing recommendations, so you can choose the right tenant.
transunion smartmove is the landlord solution for great reports, great convenience, and great renters. landlords receive a credit report in a unique format for rental screening, a criminal background check based on hundreds of millions of national criminal histories, a national eviction report, a resident score, and a personalized rental recommendation.