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Landlords, Protect Yourselves and Have Your Tenants Purchase Renter’s Insurance

When leasing a house or an apartment to others, I recommended that you have your tenants purchase a renter’s insurance policy. Do not be passive here, no matter how eager you are to find someone to rent your available property.

As the house, condo, townhome, multi-family, or apartment building owner, the buck stops with you. You carry the weight of responsibility and are liable for injuries on your property. That is difficult because you rely on your tenant’s (or your tenant’s children’s) judgment to keep you from being exposed. Even the most well-meaning tenant might not be able to prevent a freak injury that could occur. Without a renter’s insurance policy, you’d be the only one on the hook for payment. 

We encourage all landlords to require their tenants to purchase renters insurance coverage. Such insurance provides coverage for their belongings (something the landlord’s insurance policy does not) plus liability insurance. That part of the policy is there for your tenant’s legal fees and potential judgments they could owe afterward, and their policy responds before yours would have to. 

What’s the big deal?

So what are some of the everyday occurrences that could cause a liability issue to arise? Below is a list of events that would lead to a lawsuit and the need for liability insurance. Even if there is language in the lease that forbids the tenant’s ownership, possession, or operation of certain things, you are still liable as the property owner. 

  • The tenant’s dog bites someone
  • Accidental discharge of tenant’s firearm
  • Mail carrier slips on icy stairs
  • Guest of tenant’s child is injured while visiting
  • A fire occurs and kills someone who is visiting 
  • A guest drowns in the pool
  • An uninvited neighbor child drowns in the pool after the gate was left open by the tenant

A partial list for sure, but use your imagination. There is no shortage of terrible tragedies that can occur at any time. There is also no shortage of affected people looking to sue afterward, especially if it’s to go after the almighty landlord. 

How to Make it Happen

If you require your tenant to purchase a renters insurance policy, you can buy yourself a little peace of mind. Here are a few things to ensure the policy is set up right and stays that way. 

  • For each, his own (or her own) – If the lease is in the name of multiple individuals who are not related nor married, be sure all purchase a separate policy. Many carriers will not insure unrelated people on the same policy. A few will allow it, so check the policy’s declaration pages and confirm that each name appears specifically under the “named insureds” section. 
  • Look for the limits – The policy’s liability section matters most for you. Most carriers start at $100,000, and you should ask for more, and I recommend at least $300,000. The difference in price on the policy is a matter of a few dollars for the year. Don’t skimp on this part. 
  • Prove it – What’s to stop the tenant from purchasing the policy, moving in, and canceling the insurance the next day? You are not a named insured, so you’d never know. Do not fear; we’ve got you. The renter’s policy has an “Additional Insured” section. Have the tenant instruct their insurance carrier to add your name and address as an additional insured. There is no extra cost for that. The insurance carrier notifies the additional insureds whenever a policy renews or cancels. Be sure to do that as it assures that the policy will remain in force per the lease agreement.

Because the average cost for a renters insurance policy is about $15/mo., it is a cost-effective way to ensure protection for you and your tenant. We can usually get a quote completed in under 10-minutes, so send your prospective tenants our direction, and we’ll get it done!

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