You’ve seen ads for rental insurance. But do you know what it covers OR if you can require tenants to get it?
Rental insurance is a specific type of policy that covers possessions within the home as opposed to the home itself. It is highly beneficial to your residents in the event of flood or similar disaster since you are not responsible for damage to personal possessions – only the property itself. Some property owners may require tenants to obtain rental insurance. Even if you don’t require your residents to have renal insurance, you can advise them to get it.
Benefits of Rental Insurance for Residents
- Protection against personal property loss or damage: Renters insurance provides coverage for the loss or damage of personal property due to theft, fire or other incidents leading to personal property loss or damage. This includes items such as furniture, clothing, electronics and jewelry, to name a few. If the tenant’s belongings are damaged or stolen, renters insurance can help cover the cost of replacement or repair for the items lost.
- Liability coverage: Renters insurance also provides liability coverage, which can protect the tenant if someone is injured on the property or if they accidentally cause damage to someone else’s property. For example, if a guest slips and falls in a tenant’s apartment, renters insurance can help cover their medical expenses and any legal fees that may arise from a potential lawsuit due to the incident.
- Additional living expenses: If a rental property becomes uninhabitable due to a covered loss, such as a fire or flood, renters insurance can help cover the cost of additional living expenses. This includes things like hotel stays, meals, and other necessary expenses while a home is being repaired or rebuilt.
- Affordabilty: Renters insurance is typically affordable, with policies starting at just a few dollars a month. This makes it an affordable way to protect personal property and finances.
- Peace of mind: Perhaps the most significant benefit of renters insurance is the peace of mind it provides. Knowing that there is protection in case of unexpected events can help alleviate the stress and anxiety that come with renting a home.
Benefits of Rental Insurance to the Housing Provider
Renters insurance does help protect the property owner from liability lawsuits if someone is injured in the rental property, especially guests of the resident. It also helps cover the cost of reimbursement for the tenant and their belongings if there is damage to the rental unit. Additionally, it can protect the owner from large deductibles or liability claims in case of damage to the rental property.
Can property owners require tenants to have renters insurance?
Yes, property owners can require tenants to have renters insurance as a condition of the lease agreement as long as it is specified in the lease and required of all tenants who live in the rental property. In fact, many property management companies make it a standard requirement for all tenants.
Requiring renters insurance helps protect both the owners and the tenant by ensuring that the tenant has financial protection in the event of damage, theft, or liability claims. Additionally, it can help reduce the property owner’s liability and insurance costs by shifting some of the risk to the tenant’s insurance policy.
When requiring renters insurance, property owners should make sure to include the requirement in the lease agreement and clearly communicate the requirement to tenants before they sign the lease. They should also provide tenants with information on how to obtain renters insurance and any specific requirements for the policy.
It’s important to note that while property owners can require renters insurance, they cannot require tenants to purchase a specific policy or endorse a particular insurance company. Tenants have the right to choose their own insurance provider and policy, as long as it meets the requirements set forth by the owner.
Does renters insurance cover regular maintenance?
Renters insurance typically does not cover regular maintenance or repairs to the rental property that are the responsibility of the property owner. This includes things like repairing leaky faucets, fixing broken appliances, or repairing damage caused by wear and tear. Just like car insurance only applies after an accident, rental insurance only provides coverage after a fire, flood, bad storm or other incident. It is important to note that renters insurance policies also have certain exclusions and limitations, so it’s important to review the policy carefully and understand what is and is not covered, especially if you like in an area where natural disasters like hurricanes, tornadoes or fires are common.
If anyone in the relationship has concerns about the condition of a rental property, the tenant should contact the property manager to discuss any necessary repairs or maintenance. In some cases, the property owner may be responsible for repairing certain items, while in other cases, the tenant may be responsible for making the repairs themself or hiring a professional to do so.
The benefits to the tenant and property owner of having renters insurance are immeasurable with the many uncertainties of life. There are many options for both to explore in the insurance market and we at Livable encourage both to find the best options that suit the needs of each party.
Are you a property owner looking to improve your net operating income? Contact us today to find out how Livable can help you recover the rising costs of master-billed utilities, including water.