As a landlord or property manager, you might have wondered if you should require your tenants to have renter’s insurance. Renter’s insurance can protect you, your property, and tenants. In this article you will learn the benefits of requiring renter’s insurance for both landlords and tenants.
Renter’s insurance is an insurance policy that protects renters from unexpected events, such as natural disasters, theft, or injury. There are three types of coverage provided within a typical policy: personal property, liability, and additional living expense. Read more about renter’s insurance and coverage from Allstate.
There are several benefits to landlords for requiring tenant’s to have renters insurance.
1. Relocation expense – In certain states, landlords may be required to cover tenants’ relocation in the event of a natural disaster or fire. Some renter’s insurance policies cover temporary living costs for tenants so you don’t have to worry about it.
2. Reduces the risk of a lawsuit – If a tenant’s belongings are damaged or stolen, or if someone is injured, they could decide to sue the landlord. If they have renter’s insurance, the policy will generally cover the costs and will mitigate the potential of a lawsuit.
3. Damage and injuries from pets – Some policies can cover pet damage or injuries caused by a tenant’s pet, which can help lessen any liability for your tenants that may have animals. Coverage can be different for each tenant, so make sure you know if their policy covers pets or not.
4. Provides peace of mind – Requiring renter’s insurance can give you peace of mind knowing that you do not have to worry as much about any of the events listed above. It allows you to be more at ease knowing that their policy can cover any damages or losses that may occur. With Particle Space’s Property Management platform, your tenants can request a renters insurance quote directly within their tenant portal.
In addition to being beneficial for landlords, renter’s insurance provides many benefits for tenants as well.
1. Medical expenses – If a guest or visitor is injured on the property, most policies cover medical expenses up to the policy limit. According to the Insurance Information Institute, a typical policy includes $1,000-$5,000 worth of medical coverage.
2. Legal costs – If someone is injured on the property or the tenant accidentally injures someone, they can decide to sue the tenant. Luckily, renter’s insurance can help cover the legal costs up to the policy limit.
3. Natural disaster – If a natural disaster causes the property to be too damaged to live in, renter’s insurance can cover hotel or temporary living costs for a tenant if they need to relocate.
4. Loss due to theft – Generally, renter’s insurance covers anything in the tenant’s possession that is stolen or taken off the property. This includes things that are being rented or borrowed by the tenant. In addition, there is also “off-premises” coverage that can help if someone steals from a tenant’s car.
5. Damages due to children or pets – If a tenant’s child damages a neighbor’s property, or perhaps a tenant’s dog bites someone, their insurance policy can typically cover injuries or damage. However, each policy is different, so this may not apply to every tenant.
Landlords can require renter’s insurance within a new lease or lease renewal clause, but it must be required for every tenant. It is recommended that you do research on your local and state laws before adding any clause to your lease. The easiest way you can require renter’s insurance is by adding a clause in your lease that says: “Tenant must provide proof of renter’s insurance within 14 days of the lease start date.” With Particle Space’s Property Management platform, you can share leases with tenants and invite tenants to electronically sign agreements.