Key Reasons Landlords Should Require Renters Insurance

If you’re a landlord, you have a lot of responsibilities to your tenants. You’re required to keep your rental properties habitable, of course, and to have your own property insurance. You may even choose to take extra steps to protect your tenants by equipping your properties with easily changed electronic locks, for their safety and your convenience.

In addition to these steps, landlords have to enforce rules and standards that protect your tenants and their neighbors, like requiring tenants to keep hallways clear of trash or possessions, not allowing them to smoke too close to the building, and performing annual inspections.

Still, amidst all these requirements there’s at least one thing more landlords should be doing that they seem to overlook – requiring tenants to have renters insurance.

What Does Renters Insurance Do?

If, as a landlord, you’re required to have specific landlord insurance, why would your tenants also need to be covered? This is a sometimes contentious issue with tenants, at least, who don’t think these policies should be required, but landlords can justify requiring renters insurance in a number of ways. Key rationales you may offer include:

  • Tenant Protection: Tenants may not like to hear that you require them to have a renters insurance policy for their own protection, but it’s the truth. Your landlord insurance policy won’t cover their personal possessions if they’re robbed or there’s an accidental fire or leak that is not caused by your negligence.
  • Protect Their Friends And Family: Your landlord policy covers personal injury issues that take place in public or general areas, but if someone is hurt in your tenant’s unit, such as because they trip over something or they’re bitten by a pet, your policy won’t cover it. They’ll need their own to take care of their family and friends.
  • Avoid Homelessness: One of the worst things that can happen to a renter is that their property becomes uninhabitable due to a disaster, and they’re put out onto the street. Well, if that happens and they have renters insurance, that won’t happen. Renters insurance provides coverage for interim housing, which can be a lifesaver for tenants.

Requirement Concerns

Many landlords are concerned that they can’t actually require their tenants to have renters insurance, but as a landlord you have a great deal of leeway and, as a private property owner, you’re permitted to set your own terms as long as they are not discriminatory – and requiring renters insurance isn’t. As such, landlords can generally require that tenants present proof of an active policy at the time of rental and upon request throughout, especially upon renewal. Though there are often exceptions for individuals in social housing, whose rent is subsidized, for private apartments, this is a reasonable request.

While there are many things the state can’t require people to do because it is a private matter, in contracts between two private citizens – which is precisely what a rental agreement is – there are fewer limits on what is allowed. As a landlord, then, it’s just good business to require renters insurance and, if your tenants can see through the small added cost, they’ll quickly see that it’s just the smart thing to do.