There are many landlords who choose to not require that their tenants obtain renter's insurance. You can choose to make this a provision in the lease, but even if you do not choose to do so, you should at least recommend that your tenants obtain renter's insurance.
The owner's policy protects the building structure. However, it does not protect the contents of the home. Also, after a disaster, your tenant may not have anywhere to live unless he or she has renter's insurance. If they do, while you're repairing the property, your tenant will receive a payout to finance a hotel stay. This can help keep your relationship healthier.
The Tenant Will Be Better Able to Still Pay Rent
The precious belongings that are lost by the disaster cannot be replaced. However, the cash value of these items can go a long way toward replacing what was lost. When the tenant is able to replace his or her belongings, he or she is less likely to default on rent since money will not have to go toward essentials. This allows you to possibly keep your tenant.
The Tenant Will Be Less Likely to Sue
After an accident, there might be a dispute over who is responsible for paying for damages, even if you are not actually legally liable for the lost property. Your tenant may choose to sue you. However, if they have renter's insurance, they might simply file a claim and be less likely to sue.
Guests and Neighbors Will Be Covered
Renter's insurance not only covers lost or damaged property, but also covers liability on the rental property. If someone is bitten by a dog, for example, the renter's insurance would cover this. If the apartment has a fire not caused by the tenant and the fire causes damages to a neighbor, this would be covered by renter's insurance. However, if the tenant does not have renter's insurance, the neighbor or visitor might want to sue you.
Renter's insurance tends to be very cheap and those holding it can be covered for a surprisingly high amount. The premium is based on the value of the assets in the home.
If you're concerned that renter's insurance requirements will drive off prospective tenants, you could always cover the cost yourself and simply roll the requirement into the rent. However, if you want to keep your rent as low as possible, leave it as an option, but strongly recommend it. Contact a company like Angel Auto Insurance to learn more.Share