Is Renter’s Insurance Necessary?
Updated: Feb 10, 2021
Considering that it costs as little as $15 per month, there is no reason to cut corners with it. As a landlord, it is always recommended to make it a requirement of the lease and ask your tenants to show proof of renter’s insurance at lease signing and renewals. Adding a renter’s insurance requirement to the lease will benefit the landlord as much as it will benefit the tenant.
Most tenants are under the impression that in case of a fire or flooding, damage to their belongings are covered by Landlord's insurance. That's unfortunately not the case. In addition, tenants may face liability charges if the cause of fire is determined to be their fault. Furthermore, tenants may not be able to seek compensation for temporary accommodation in such case. As a landlord, requiring your tenants to obtain a renter’s insurance will reduce your liability too. Although you may have a homeowners policy, it will keep you out of tenant-related claims and keep your insurance premiums low. For example, if a guest of your tenant sustains an injury at the property, they will claim the hospital bill to tenant’s renters insurance. In a nutshell, having renters insurance will give both the tenant and the landlord peace of mind and keep both sides from having uncomfortable financial and legal disputes down the road.