As a Landlord you might not care if your renters have insurance or not, because you already purchased a landlord policy which covers your property for fire and liability, but did you know that renter’s insurance also covers your property? Yes, it covers tenants who lose everything to fire or burglary, but it can also be used in the event your rental is damaged. Deposits are often limited both on amount and the flexibility in how it can be used. Renter’s insurance covers the property for the following:
In the event the tenant is at fault for a fire, renter’s insurance can cover up to $20,000 of additional expenses to the benefit of the property owner. Fire alone is the cause of $10.5 Billion dollars in damage to rental properties in the U.S. every year. That is a fire every 63 seconds of everyday last year. More than 500,000 rental structures were affected by fire. Having your tenant assist in the coverage for fire is a necessity.
The average rental has cleaners, bleach, paints, batteries and even medicines that all have the possibility of causing an explosion. The average home has between 3 and 10 gallons of explosive chemicals. Making sure your property is covered in the event of an accidental explosion is a must.
Water damage is one of the most common forms of damage to a rental. Whether from a tub left running and then overflowing to the floor and trim or even the unit below or a dishwasher that used dish soap instead of dishwasher soap and suds filled the kitchen and ruined the cabinets. Water damage is permanent and if not checked can form mold and other physically hazardous conditions. A tenant’s responsibility to take care of their rental should include renter’s insurance.
No one wants a burglar, but it does happen every 20 seconds in the U.S. When an intruder enters a home they typically trash the place and damage windows, doors, walls, locks and much more to get in and out. Though it may be the tenant’s valuables the thief was after it usually ends up being your rental that gets the majority of the damage. Protecting your rental for events like this helps ensure your investments value.
Can Landlords Require Their Tenants to Have Renter’s Insurance?
Renter’s insurance can be required by the landlord. Many tenants don’t know their valuables are not covered by the landlord’s insurance in the event of a fire. Requiring your tenants to have insurance helps ensure tenants are not left out on the street in the event of a fire or other unforeseen events that require the tenant to vacate their home. Renter’s insurance as a requirement should be stated in the application prior to renting. There are a number of companies that supply renter’s insurance and the average cost is around $12 per month.
Renter’s insurance is both valuable to tenants and landlords. Having it as a requirement can assist in limiting the amount or need to depend on the cleaning deposit. The benefits can helps families that rent from you from being left without a home during dire times and can assist in getting your investment back to generating an income.