Requiring your tenants to carry renter insurance not only benefits them but as you as well. Many renters don’t realize that carrying a renter’s policy is the only real way to protect their possessions. And for you as the landlord, renter insurance offers another layer of protection in our litigious society.
Advantages of Requiring Renters Insurance
A significant benefit of adding the renter’s insurance requirement to your lease is that it keeps you out of the courts. Unfortunately, many times when a tenant’s property is damaged, and they don’t have a renter’s policy they try to pin it on the landlord as their responsibility.
For example, let’s say your tenant throws a party and one of their guests is injured. The tenant carries no insurance, and the person injured has no health insurance. Therefore, the injured party or the hospital files a claim against the landlord. While the landlord’s insurance may pay the claim, higher insurance premiums or even cancellation may follow. But if the renter had an insurance policy, their coverage would pay keeping the landlord out of it.
As you can see, adding in a renter’s insurance clause into your lease reduces your responsibility. And not just in a situation where an injury occurs. It can also take you out of the equation when your tenant needs to find temporary housing because of a fire or natural disaster. While you would most certainly feel bad that your tenant is displaced, you would be in the midst of dealing with the property damage and may not be able to assist with finding lodging. A renter’s policy gives both the tenant and you as the landlord, peace of mind if catastrophe strikes, they will be taken care of.
A rental insurance requirement in your lease can put your mind at ease. Not only can it weed out bad tenants, but if the tenant accidentally burns your building down or causes other damage, their policy could cover a significant portion of the cost to repair the damage or at the very least your deductible.
At Insured ASAP we believe in helping all business owners protect themselves from all angles. We offer the insurance solutions that give you the confidence, no matter what life throws at you will be there along the way to help you through it. If you have questions about your current landlord policy or would like to know about how to ask your tenants to carry renter’s insurance, please give our insurance experts a call today. We will be happy to guide you in the best direction to protecting your assets.