Top 10 Reasons Landlords Should Require Tenants To Carry Renters Insurance
Landlords in California may require tenants to obtain renter’s insurance for the best interest of both parties. Renters insurance protects you from liability and the loss of your belongings due to theft, vandalism, flood, tornado, earthquake or fire. These are the top reasons landlords require their tenants to carry renters insurance.
A provision that is written into most lease agreements advises the Tenant to carry renter’s insurance to protect tenant from any such loss or damage. However, this suggestion often gets looked over and not follow-up on and may not help fully protect the landlord or tenant.
A reputable and experienced property management company will often present additional terms that requires the tenant to obtain renters insurance and that the landlords be named as an “additionally insured” on the policy. It is also beneficial to have the tenant show proof of insurance coverage within a few days of the date of signature of the Rental Agreement. Protecting the tenant and landlord with insurance is an excellent expenditure that provides peace of mind.
1. If your property catches fire, through no fault of the tenant, the owners insurance does not cover the tenants’ personal property or expenses they may incur while the property is being repaired. The tenant may go after the owners if they have no other protection.
2. If your tenants cause their neighbors to suffer a loss, through bodily injury or property damage, their Renters Insurance will provide protection that would compensate the injured party. This protection can prevent arguments over liability between you and your tenant.
3. If someone sues your Renter for monetary damages for some other reason, and they haven’t done anything illegal, their Renters Insurance puts Insurance carrier money on the table and as the landlord you don’t need to be involved.
4. Your tenant’s personal property is protected (less the deductible) while they are away from home, like in their car, or when traveling. If they lose any belongings of value, they may have fewer resources to pay rent.
5. Tenants can receive discounts by bundling their auto and renters insurance, which will save them money while protecting more of their assets and personal belongings. Depending on how expensive their auto insurance is, their Renters Insurance might even be FREE! This is information that tenants may not be aware of and may be more open to carrying renters insurance coverage.
6. Get peace of mind by knowing that should a loss occur, both the tenant and landlord will be protected from any loss that may occur.
7. For Landlords, having the funds readily available to replace lost items will reduce the strain on the relationships with tenants.
8. Landlords that require their tenants to carry renters insurance, typically have less problems with their tenants and managing their property.
9. As the landlord you can make this a mandatory condition of renting the property, which means you never have to worry about your tenants not being covered when the unexpected happens in life…and it does!
10. It’s very inexpensive, and easy to obtain a policy. A typical policy covering up to $15,000 in property damage and $100,000 in liability coverage cost under $200 per year or less than $20 per month.
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