Renters often believe the landlord is liable for everything that happens on the property–including any damage to their personal belongings. But this is not always the case.
More likely, the landlord’s insurance will only cover damage to the building, while an uninsured tenant will have to pay to replace their belongings.
The majority of tenants take a pass on renter’s insurance. Some are not aware of it. Others don’t think it is worth the cost.
Renter’s insurance provides valuable protection, and is not expensive compared to the value of the tenant’s possessions. Moreover, a renter’s policy may cover more than just belongings. It may protect a tenant from having to pay out damages if they–or their guests–cause an accident or damage the building.
Renter’s insurance can be valuable to landlords, too.
In fact, a number of property managers now require renter’s insurance in their lease agreements–so that the tenant is protected in the case of fire, theft, or negligence.
If you decide to require renter’s insurance, you can include a renter’s insurance provision in your lease. It is a good idea to demand that the tenant provide you a certificate of insurance. This proves that the tenant has complied with the requirement, and you will have the contact information for the insurance company.
Even if you are not prepared to make renter’s insurance mandatory in your leases, you still may want to encourage tenants to purchase it. In your policy statement or acceptance letter, include a warning to the tenant that your insurance does not cover replacement of their personal belongings in most cases. If the tenant causes damages, like a kitchen fire, it is possible that the tenant could wind up owing the landlord for repairs. Renter’s insurance may be their only source of compensation for losses, like fire, theft or negligence of the tenant or a guest.
In order to obtain renter’s insurance, the tenant will need to complete an inventory of their personal belongings. While this can be time-intensive, it is time well-spent. Without the inventory, the tenant has little chance of remembering all they lost. And, by completing the inventory, they will see just how much they have to gain by taking out a renter’s insurance policy.