As a Landlord, Can I Require My Tenants to Have Renters Insurance?

Being a landlord requires numerous responsibilities, one of which is protecting your property. It’s likely that you have landlord insurance, but you may wonder if it’s possible to require your tenants to have their own renters insurance. The answer is probably yes.

To be clear: It is not mandatory for a landlord to require tenants to get renters insurance. However, you may require that they obtain a renters policy as a condition of the lease. Requiring tenants to have their own renters insurance policy can give them liability protection and can help protect you as a landlord from liabilities caused by your tenant.

As a landlord, you might want to require renters insurance of your tenants for several reasons. Consider these benefits:

• Renters insurance can help cover damages associated with liability claims. Typically, as the property owner, you could be responsible for injuries sustained on your property. A renters insurance policy, however, could help cover your tenant in the event of an injury to your tenant’s guests, up to the limit of the policy. This protection may or may not be available, depending on the circumstances of the injury.
  
  
• Accepting pets may be easier when tenants have renters insurance. While tenants may cherish the company of their pets, the potential liability can be worrisome for a landlord. Requiring tenants with pets to have a renters policy helps offer protection and allows you to extend rental opportunities to those with four-legged companions. A renters insurance policy typically covers injuries a tenant’s pet might cause to others while on your property, up to the liability limit.
  
  
• Renters insurance can help protect you from a tenant’s party damage. You may decide to prohibit large parties in the terms of your lease, but damage from smaller get-togethers could still occur. You may want to require renters insurance to help cover losses in the event of a mishap. Without a renters policy in place, damage or injury from a gathering gone wrong could be your responsibility.
  
  
• Renters insurance can help protect a landlord against tenant negligence. Tenant negligence can take many forms, ranging from a kitchen fire while cooking to water damage from an overflowing tub. When a tenant’s negligence causes damage to your building, the tenant’s renters insurance could help cover the damage to your property.

A typical landlord policy will not cover the tenant’s personal property, such as furniture or electronics. One big difference between a landlord’s insurance coverage and a tenant’s renters coverage is that your insurance would repair the building in case of damage from a covered loss, but would not cover the costs to replace or repair your tenant’s personal property.

Here are some specific reasons your tenant should consider renters insurance:

• In the event of a covered loss such as a fire, which makes the property uninhabitable for a period of time, a renters insurance policy might cover the cost of temporary housing.
  
  
• If a tenant’s personal belongings are stolen, a renters insurance policy would typically cover the loss.
  
  
• If a tenant is found responsible for causing water damage to their apartment and/or the units below, a renters insurance policy could cover the damage.
  
  
• If your tenant negligently causes property damage or personal injury, a renters policy could cover the damage and help them avoid some out-of-pocket expenses and potential legal fees, up to the policy limit.

It is up to your tenants to decide how much renters insurance they want. But by requiring a minimum level of renters liability insurance as part of the lease agreement, you are highlighting the value of protecting their property and minimizing their liability risk.

Tenants who own expensive electronics (such as computers or gaming consoles) or keep other items of great value in their home should consider adding a personal articles policy to assist them with replacement costs if any of those items are damaged or stolen.

Landlord insurance typically covers the liabilities attached to owning a rental property. It covers things like damage to the building and medical payments for visitors injured on the property. Tenants have separate interests that are not covered by your landlord insurance policy. With renters insurance required in the lease, you are helping your tenants protect themselves against financial loss that could occur as a result of an insurable incident.

If you’re a landlord or considering becoming one, you’ll want to protect your property with landlord insurance. Learn more about landlord insurance and then contact your local independent agent or Travelers representative to get a quote today.