Even though renters insurance can provide substantial benefits to both renters and landlords, under half of all renters are insured. Without insurance, tenants aren’t covered in case of robbery or damages, leaving both sides at significant financial risk. Landlords can act to ensure both themselves and their renters are covered.
The main reason more people don’t have insurance is simply a lack of awareness. There are so many different things to consider when finding an apartment, like whether your rent price is fair for the neighborhood or the kinds of amenities you want your home to have. While you can use tools like a rent calculator or email the realtor to solve these problems, renters insurance often gets pushed to the back burner.
It’s also common for renters to assume that their landlord’s policy will cover their own damages, but that isn’t typically true. They also may not realize that a typical insurance policy costs less than $150 per year. These are some of the top reasons landlords should require renters to acquire insurance as part of their lease.
Insurance Reduces Your Own Liability
In cases where damage to the property occurs due to natural causes, many states require landlords to assist tenants with finding a place to stay temporarily. This requires resources, time, and energy above and beyond assisting them with their property and managing your own losses.
When your tenants have renters insurance, their policy will cover them for all relocation costs, removing you from responsibility. In addition to protecting renters from their own financial losses, renters insurance also provides significant benefits to landlords.
Renters Insurance Covers Your Own Deductible
As a landlord, you likely have your own insurance policy, which will pay out in case of damages to your building. But while this will protect you to a predetermined point, you’ll still be responsible for the costs up to a certain deductible.
If your tenant has their own coverage, their policy will pay out the initial costs, therefore covering the owner’s insurance deductible. This will make tough circumstances more manageable for both sides, as your tenants will be able to depend on their insurance policy for coverage.
Coverage Will Give You Peace of Mind
More than anything, what you’ll notice when you have insurance coverage is simply that you don’t need to worry about potentially problematic situations. You’ll no longer be considered responsible or liable in lawsuits for damages that aren’t your fault, and your financial assets will be significantly safer.
You’ll also be able to have a more positive relationship with tenants, who won’t be potential sources of litigation. This removes any combative or defensive dynamic from the landlord-tenant relationship and makes things easier for both sides.
These are just some of the many reasons why landlords should make renters insurance a condition of each lease. For a small cost, tenants are able to receive personal property coverage sometimes up to $50,000 and substantial personal liability. This ensures security for everyone involved and makes your job significantly easier.