As a landlord, one of the most challenging aspects of renting out your place is finding tenants who will pay you and also treat the home with respect. If you do not want to end up with a lawsuit and extensive bills related to property damage, you should require that any tenants who move into your apartment carry a renter's insurance policy. Here's why.
1. Renter's insurance covers tenants' items.
The homeowner's insurance policy you carry on the home does not actually protect your tenants' possessions. Their furniture, clothing, and decorations, for example, would not be covered by your policy if there was a fire in the home. While it may seem like this is not your problem, tenants have been known to come after landlords and sue them after their possessions are damaged in a fire or other incident. They don't always win, but that's still a headache you do not want to deal with. If your tenants have renter's insurance, the policy would cover these items so you do not have to do so.
2. Renter's insurance covers injuries and medical costs.
What if your tenants have a guest over, and that guest becomes injured in the apartment? Under certain circumstances, your homeowner's insurance may cover the expenses, but in many cases, it is considered to be the tenant's fault—so your insurance may decline to pay for the medical costs. A renter's insurance policy, however, would pay for that person's medical costs. This is of benefit to you since it means your renter won't go bankrupt paying for medical bills and will therefore be able to remain in the apartment.
3. Renter's insurance shows a responsible tenant.
You want to rent to people who are responsible and who have their lives together, right? Carrying renter's insurance is a sign that a tenant is mature and responsible. They are thinking about their risk and taking steps to mitigate it. Plus, tenants with terrible credit or no income may not be able to afford renter's insurance, so this weeds them out of your applicant pool automatically.
If you have an apartment to rent out, make sure the tenants you choose carry a renter's insurance policy. They can buy a policy for a few hundred dollars per year from an insurance company, and the policy offers a lot of protection—not only for their interests, but for your own interests as a landlord, too.
Share12 September 2018
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