Did you know that only about 41% of renters have renters insurance? If you’re a landlord, the odds are you already have landlord specific insurance — but that doesn’t mean that your renters are necessarily covered for all of their issues. Not only should you strongly suggest they get insurance, you may want to actually require that they do so.
Renters Insurance Protects You, the Landlord
What happens if a renter has an item stolen? If a renter’s guest gets injured? If they have renters insurance, it’s very likely that their insurance policy is going to kick in immediately — and that means that you’re off the hook. But if they don’t have renter’s insurance, the liability may fall on you. They’ll go after your own insurance policy as the homeowner and landlord next, and that could lead to raised premiums.
Renters Insurance Can Cover Your Deductible
When something does happen such as damage to your building, your tenant’s policy is going to kick in to cover your personal expenses. For instance, damage to your floors may cost $2,000 on a policy that has a $500 deductible. If your renter has renters insurance, that $500 deductible will be paid by the renters insurance and you won’t need to go to court or pursue payment. If your renter does not have insurance, you may need to try to collect this from the renter. If the deductible exceeds the amount of their deposit, you may not be able to actually recover the funds.
Renters Will Have More Options
What happens if your house burns down? Homeowner’s insurance is going to protect you against your losses, but your tenants are going to need somewhere to stay — and they’re going to need replacements for their items. If your renters have renter insurance, they’ll get a replacement of their own personal items and they’ll likely be able to rent a motel or hotel until they can find a place to stay. If the renters do not have insurance, they may instead look to you to take on responsibility for these arrangements. Whether or not you’re responsible for these arrangements can vary on the situation, but simply having to fight against it can be time-consuming and costly.
Renters With Insurance Are More Responsible
In general, a tenant who doesn’t want to maintain insurance is likely a tenant that you don’t want to have. Tenants who value their own possessions and want to protect themselves will purchase renters insurance; it’s very affordable and covers quite a bit. If a tenant is resistant to the idea of having insurance (or simply doesn’t realize that insurance is something they should have), they might be more likely to cause damage to your property or be irresponsible with their lease.
Renters With Insurance Have Better Financial Stability
What happens if your renters have all their items stolen? It won’t fall on you, the landlord, to replace it… but it may mean that they will have substantial difficulty paying the rent next month. By ensuring that your renters can bounce back from these types of financial setbacks, you’re also ensuring that your rent is going to be paid on time.
Renters insurance is the responsible choice. A landlord isn’t allowed to require that an existing tenant get renters insurance, but they are allowed to require it in a new lease. As your leases expire and you look for new tenants (or look to renew old leases), you may want to strongly consider requiring your tenants to get renters insurance. It is not expensive and can often be bundled with other policies. Contact Lanham Insurance Agency for more information.