Renters insurance isn’t mandatory under any federal or state laws, but requiring your residents to have it gives everyone peace of mind.
As of 2020, only 57% of renters in the United States had renters insurance, compared to 42% in 2018. As a home provider, you can and should require residents to get renters insurance for the duration of the lease. Adding a renters insurance requirement to the lease will benefit you as much as it will the resident.
Renters insurance is relatively inexpensive for residents—often less than $20 per month. Many residents assume that a home provider's insurance policy covers their personal property, but it does not. Because laws vary by state, be sure to speak with an attorney about adding a mandatory renters insurance policy to your lease.
Here are some benefits of requiring renters insurance at your property:
- Protects the residents’ personal property: A home provider’s insurance covers the actual building and any property owned by the building—which means that anything the resident owns is not covered. It’s a smart idea to require renters insurance to best protect your residents and their belongings like electronics, furniture, clothing, collectibles, etc. In the event that anything is stolen, damaged, or destroyed, renters insurance will cover the costs and issues at hand.
- Lowers the risk of litigation: Requiring each resident to purchase renters insurance can reduce a home provider’s legal liability, too. If there’s a fire at the property and it spreads to multiple occupied units, residents may sue their home provider for damages to personal property but with renters insurance, those personal belongings would be covered.
- Protects against personal liability: Having a renters insurance requirement helps home providers against personal liability claims, too. If someone is injured on building grounds, home providers are generally only liable if the property is structurally unsound. With renters insurance requirements, residents and home providers have peace of mind knowing that these policies include personal liability coverage to cover medical or legal costs if someone is injured within a residential unit. This helps minimize or eliminate expenses for the home provider—and resident—in the long run.
- Helps cover relocation costs in case of emergency: If a property becomes unlivable—whether it's due to a natural disaster, fire, extreme weather, etc.—home providers can bear the responsibility of the cost of relocating their residents. With renters insurance, a loss of use coverage can help with additional living expenses that residents might incur while they’re away from home, like food and a place to stay.
- Makes it easier to be a pet-friendly building: Renters insurance policies can include pet liability coverage, which makes it easier for home providers to adopt pet-friendly policies on the premises. Of course, residents will want to buy pet insurance to cover any veterinary bills. Pet liability coverage all depends on your pet’s history and breed; renters insurance usually won’t cover any damage your pet might cause to your apartment or property, as well.
- Renters insurance could help identify reliable tenants: Home providers are more likely to accept residents who carry renters insurance, as they are more likely to be responsible and to care about their surroundings. Requiring renters insurance can be an effective way to find trustworthy and considerate residents.
Requiring renters insurance for your residents gives everyone some peace of mind. From Lemonade to USAA, Progressive, Nationwide and more, there are renters insurance policies available for everyone.
Both you and your residents can benefit from renters insurance policies which will help you from having to deal with uncomfortable financial and legal scenarios down the line.
