The short answer is yes, a Landlord can require their Tenants to carry renters insurance.
Most renters don’t realize that the Landlord does not typically insure, nor are they responsible for:
- Loss to a Renter’s personal property.
- Liability losses at the location for which the Renter is responsible. The policy insures against losses to other Tenants around you, based on problems the Renter may cause.
- Property damage to the building for which the renter is responsible.
ALL of which may be transferred to an insurance company through the use of a Renter’s Insurance policy.
Many Leases require Tenants to carry Renter’s Insurance. Proof of coverage would then be necessary before moving into the Premises and for every new term of the Renter’s Insurance thereafter. If a Lease Agreement requires this, and you refuse, your Application would be denied. Existing Tenants who refuse to renew their renter’s insurance would be evicted.
This policy is there to protect you and your belongings as well as to protect you from subrogation. Landlords only care whether you have it because it will help avoid trouble when something happens and you get upset because they and their insurance isn’t going to cover you.
Renter’s insurance is basically like a modified homeowners policy that protects against damages related to you and your things. It could include options such as fire, theft, vandalism, water damage, earthquake, etc. While it doesn’t cover the physical structure in which you live, it may cover a portion if your negligence resulted in damage. What is typically covered is whatever property you keep in your home, as well alternative accommodations should your home become uninhabitable.
In otherwords, carrying renter’s insurance may protect you from paying out of pocket for hundreds of thousands of dollars in damages.
A lot of people think that the Landlord or their insurer will step up and pay if they are robbed, flooded, or something else happens, but unless the Landlord is specifically liable through recklessness or neglect, they are not responsible for anything that happens to your belongings.
As far as paying for a hotel, that won’t happen either, unless your Landlord is directly at fault. If your apartment floods or burns, or if a pipe bursts, you’ll be prorated for the rent during the time you had to stay away from home (you did read your Lease Agreement, right?), but that’s all you get.
Renters insurance isn’t expensive, and it’s strictly for your benefit. It won’t ever pay your Landlord for the things of which your Landlord needs coverage; the Landlord still needs to have their own policies. Such as homeowners and extra coverage for landlords.
A primary reason why so many Landlords require their Tenants to carry insurance is because it saves a lot of conflict and arguing in the event that something bad does happen, because that’s when the Tenant will get upset that the Landlord isn’t paying them. With a renter’s policy, the Tenant has no reason to get pissed at the Landlord, as the Tenant will have their own protection.
What mistakenly upsets a lot of Tenants is that their Landlords expect to be listed as “Additional Insured Interested” on the policy, however, in no way does that grant Landlords any coverage. All “Additional Insured Interested” means is that your Landlord is listed as someone who is automatically notified if your policy is changed in any way, or if you let it lapse. When you think about it, this makes perfect sense, as it is the only way your Landlord will know if you stop paying for your renter’s insurance.
If the prospective Tenant complains about the cost, that is a direct indication that they cannot afford the Premises. The renters insurance premiums are so low that if they are a serious problem to the Tenant, the Tenant is living too close to the edge financially, which is an indication that they may have problems paying their Rent on time, every time. So it’s a form of screening device.
Consider having your Renter’s Insurance cover at least these three things:
- YOUR belongings: (damage, theft, etc.)
- YOUR liability: (for example: if you fall asleep with a candle burning and catch the house on fire, or if your pet trips your guest who breaks a leg, or a guest of yours punches the neighbor who ends up in ICU.)
- Temporary Lodging: (relocation costs in case a disaster makes it impossible for you to live in the unit either short term or permently.)
After ten years you may pay $1,800 (at $15 per month), but if you should have an issue, you may need to pay out of pocket $5000–$100,000 or more if you don’t have insurance. Protect yourself. No matter where you find a rental, get Renter’s Insurance.