Landlords, Avoid Liability Issues and Promote Tenant Safety by Requiring Renters Insurance

If you’re a property owner with one or multiple rental units, you’re in a unique business position filled with potential risks.

As a landlord, it’s crucial to prioritize your tenant’s safety and protect yourself from possible legal implications. One way to accomplish this is by requiring tenants to purchase renters insurance.

Over the years, we’ve seen many property owners face mounting difficulty and litigation arising from landlord-tenant relationships lacking the buffer of a renters policy. We want you to avoid this painful experience by being fully prepared for an array of possible mishaps.

That’s why we wrote this article.

In it, we’ll explore various everyday occurrences that could lead to a lawsuit and the steps you can take to promote comprehensive protection for both parties involved. By understanding the benefits of renters insurance and implementing policies accordingly, you can secure peace of mind and foster a mutually beneficial landlord-tenant relationship.

Your tenants will come to appreciate you for helping protect their personal property and financial assets.

We know how challenging it can be to manage a rental property and deal with the uncertainties that come with it. You want to provide a safe and comfortable living space for your tenants, but you also want to protect yourself from potential lawsuits and losses.

That’s why we strongly recommend that you require renters insurance from your tenants. Read to the end to learn why it’s a win-win solution for both of you.

Why You Should Require Renters Insurance from Your Tenants

If you lease a house, condo, or apartment to others, you should require your tenants to buy a renters insurance policy. This is not a passive request but a smart precaution. As the owner of the property, you’re responsible and liable for any injuries that happen.

You can’t always control or prevent the actions of your tenants (or their children) that might expose you to risk. A renters insurance policy can protect you and your tenant from paying for damages or medical bills in case of an accident.

This type of coverage also protects the tenant’s personal belongings—as the landlord’s insurance does not. And it includes liability insurance. The liability portion helps with legal expenses and potential settlements related to the tenant, and it takes effect before the landlord’s policy is needed.

Common Liability Risks

Some common events that could trigger a liability issue and a lawsuit are:

• The tenant’s dog bites someone
• The tenant’s firearm goes off accidentally
• The mail carrier falls on icy stairs
• A fire injures or kills a visitor
• A guest of the tenant’s child gets hurt while visiting
• A guest drowns in the pool
• An uninvited neighbor child drowns in the pool after the tenant leaves the gate open

These are just some examples of potential tragedies that could happen at any time. You might think your lease agreement protects you from liability if it forbids the tenant from owning, possessing, or operating certain things.

However, as the property owner, you’re still liable for any injuries that occur on your premises. And you can be sure that the injured parties or their families will try to sue you, especially if they see you as a “wealthy landlord.”

Tenant Accountability

Another benefit of requiring renters insurance is tenant accountability. If one tenant accidentally causes damage to another tenant’s property, such as a water leak or fire, renters insurance may cover the cost of repairing or replacing the damaged items.

This can reduce conflicts between tenants and also save you, the property owner, from dealing with complicated, costly issues.

Minimizes Property Vacancies

In the event of a disaster, such as a fire or major storm, renters insurance can help cover the cost of temporary housing for the affected tenants. By ensuring that your tenants have a place to live during repairs, you can maintain a good relationship with them and reduce the likelihood of tenants moving out due to a lack of housing.

How to Ensure That Your Tenant’s Renters Insurance Policy Is Right for You

Requiring your tenant to buy a renters insurance policy can provide a measure of comfort. However, you need to make sure the policy is set up correctly and maintained properly. Here are some tips:

• Separate policies for separate tenants: If the lease has multiple names of people who aren’t related or married, each one should have their own policy. Many insurance companies will not cover unrelated people under the same policy. Some might allow it, but you need to check the policy’s declaration pages and verify that each name is listed as a “named insured.”
• Check the limits: The most important part of the policy for you is the liability section. This covers the damages or injuries that you might be liable for. Most insurance companies offer a minimum of $100,000, but you should ask for more. I recommend at least $300,000. The difference in cost is minimal, but the difference in protection is significant. Don’t skimp on this part.
• Verify the coverage: How can you make sure the tenant doesn’t cancel the policy after moving in? You are not a named insured, so you won’t be notified. The solution is to have the tenant add your name and address as an “Additional Insured” on their policy. This doesn’t cost anything extra, but it gives you the benefit of being informed by the insurance company whenever the policy renews or cancels. This way, you can ensure the policy stays active per the lease agreement.

Renters Insurance: A Smart Precaution for Landlords and Tenants

We hope this article has helped you understand the importance of renters insurance for landlords and tenants.

As a property owner, you face many risks and challenges that can be mitigated by all tenants having adequate coverage.

Deciding to ignore the points in this article will cause your tenants to miss out on coverage for personal property, liability, and additional living expenses in case of a loss. And there will be an increased risk of conflict and litigation between you, which will not lead to a mutually beneficial relationship.

Heeding our advice and requiring your tenants to purchase renters insurance can save you from costly lawsuits, protect your property from damage, and ensure your tenant’s satisfaction and safety.

We know how hard it is to manage rental properties and deal with unexpected issues. That’s why we’re here to help you with all your insurance needs.

We have extensive experience in writing renters policies for tenants, so you can feel secure when referring your potential tenants to us. We’ll prepare a policy that benefits both the tenant and property owner, so they gain from your wise referral and lease requirement.

We can also guide you through the process of finding the best coverage for your situation as a landlord. Whether you need a quote, a policy review, or claim assistance, we’re ready to help.

To start your journey to tailored coverage, click the Get a Quote button below. One of our insurance specialists will reach out to you once you supply a few details.

To learn more ways to protect yourself and your investment as a property owner, read 10 Common Mistakes New Landlords Make When Purchasing Insurance and How to Avoid Them.

Also read How Much Renters Insurance Should a Landlord Require in Central New York?