Many lease agreements include a provision that the tenant must carry renter's insurance. Often, however, this provision is not upheld by either the renter or the landlord and is swept under the rug. In today’s blog post, VerticalRent will look at 7 reasons why all landlords should require their renters to purchase insurance.
1. It's Easy and Affordable
It's a misconception that renter's insurance is expensive and hard to acquire. An ordinary policy that covers up to $15,000 in property damage and $100,000 in liability costs under $200 a year.
2. Cross-Line Discounts are Available
Often, renters can get cross-line discounts by obtaining renter's insurance through the same company with which they hold other insurance policies. Some companies even offer free renter's insurance to applicable clients!
3. Cover Yourself in the Event of Disaster
If something happens to the property that is out of the renter's control, such as a fire or other natural disaster, renter's insurance covers their personal property and some expenses they may incur while the property is repaired. Without renter's insurance, the renters are likely to come after their landlord for reparations. When your tenant has renter's insurance, you can focus on repairing your property rather than dealing with the renters' losses.
Requiring tenants to have a renter's insurance policy also keeps money readily available in case of a loss. If tenants don't have to pay out-of-pocket to replace lost or damaged personal property, they'll have more resources to pay their rent in full and on time.
4. You Can Write it Into the Lease
As mentioned above, many lease agreements include provisions regarding renter's insurance. You can write requirements for renter's insurance into the lease and request proof of insurance, giving you further peace of mind with your renters.
5. Avoid Conflict with Neighbors
If your renters' neighbors incur a loss because of your tenant, your tenants' renter's insurance will cover compensation to the injured parties. If your tenants are not covered by a renter's insurance policy, the injured parties may come after you to seek reparations for damages.
6. Protection Against Lawsuits
If someone files a lawsuit against your tenant, their renter's insurance will provide insurance carrier money, and save you the time and hassle of getting involved in the lawsuit procedures.
7. Reduce Strain
If your tenants have renter's insurance, the relationship between you and the tenant will feel less strained if a loss or disaster occurs. You'll also have more peace of mind knowing that both yourself and your tenants are protected, and you'll be faced with less problems than many other landlords.