Can a landlord require you to have renters insurance? Should you have it regardless?
Yes, landlords can require renters insurance as a condition of leases in most states (Oklahoma is an exception). And they can ask tenants to have a minimum amount of insurance coverage. It’s a contractual issue, and what a landlord says usually goes.
Why would my landlord require renters insurance?
Just because you’re moving to a new city doesn’t mean you’re ready to buy a house. Luckily, there are many benefits to renting. You’ll have more flexibility, and you won’t have to pay as much money upfront as you would if you were taking on a mortgage.
Even if you’re just renting, there’s a good chance that you’re keeping a lot of valuable items in your rented home or apartment. That’s why it’s important to consider signing up for renters insurance. In fact, some landlords require tenants to have it.
Some landlords may request that they be named as an additional insured along with the property manager. And a tenant could be asked at any time to provide proof that they bought and maintain renters insurance.
If your existing lease doesn’t require renters insurance, you don’t have to carry it. But pay attention when it’s up for renewal. Your landlord can always include the requirement in your new lease or lease extension. More and more landlords have started to require their tenants to carry renters’ insurance.
Keep in mind that renters insurance is just as beneficial to a landlord as it is to a tenant. Since a landlord’s policy only covers the cost of damage to the structure of a property, renters insurance provides an extra layer of… CLICK TO TWEET
Keep in mind that renters insurance is just as beneficial to a landlord as it is to a tenant. Since a landlord’s policy only covers the cost of damage to the structure of a property, renters insurance provides an extra layer of protection. There are several reasons why a landlord may require a tenant to have renters insurance.
Reduction of liability
A tenant involved in a lawsuit may try to hold a landlord legally responsible for an issue. In this litigious world, a key benefit of renters insurance is that it can keep landlords out of court. Since renters insurance provides liability coverage, it helps mitigate potential threats.
Avoiding payment for damages
If a fire, flood or another natural disaster damages a tenant’s personal items, a landlord may not want to replace or fix them. When a tenant has renters insurance, landlords don’t have to worry about replacing personal property.
Avoiding payment for accommodations
A landlord may not want to pay for temporary living arrangements while a tenant’s home is being renovated or repaired. If a renter has renters insurance, their insurance company may cover temporary housing costs and protect landlords from paying extra expenses.
Appeasing insurance providers
A landlord’s insurance company may pressure them into requiring residents to have renters insurance. It shifts responsibility to the tenant and helps them avoid messy lawsuits. Adding the requirement may even lower the cost of premiums landlords pay.
The deductible will be covered
If a tenant damages a property, a landlord’s insurance policy will cover the cost of repairing the structure of the building. But a landlord will still have to pay a deductible. If a tenant has renters insurance, his or her policy should cover a landlord’s insurance deductible.
Weeding out bad tenants
If a tenant can’t afford renters insurance, that’s a red flag. That’s another reason why requiring tenants to have renters insurance can be helpful. If tenants complain, that’s a sign that they may not be able to afford the rent.
Peace of mind
Both renters and landlords can feel relieved knowing that a tenant has insurance coverage. It takes a load off landlords’ shoulders and helps them protect their properties and keep more money in their pockets.
What does renters insurance typically cover?
Like most homeowners insurance policies, renters insurance covers liability, additional living expenses (ALE) and the cost of repairing and replacing personal possessions. The big difference between the two policies is that renters insurance doesn’t cover the cost of damage to the structure of a building.
Like most homeowners insurance policies, renters insurance covers liability, additional living expenses (ALE) and the cost of repairing and replacing personal possessions. The big difference between the two policies is that renters…CLICK TO TWEET
Another similarity between homeowners insurance policies and renters insurance is that both provide coverage against losses from fires, theft, wind storms, and some forms of water damage. Typically, they won’t cover damages following floods or earthquakes. You can get renters flood coverage from the National Flood Insurance Program or a private insurer and add earthquake coverage as an endorsement or separate policy.
Personal possessions
Renters insurance covers the damage or the loss of items within an apartment or rental home, like furniture, appliances, and electronics. Tenants often have to choose between getting coverage for the replacement cost value of their possessions and the actual cash value of their belongings. Replacement cost value replacement in renters insurance may be a tad pricier than the alternative, but it allows personal items to be reimbursed at their current market value.
Most renters’ insurance policies include off-premises coverage, which means that belongings outside the home are still covered. If you have expensive jewelry, furs, collectibles, sports equipment, or other costly valuables, consider adding a floater to your policy. The easiest way to determine whether you have enough coverage is to create a home inventory video that describes everything you own.
Liability
The liability portion of a renters insurance policy offers protection if a tenant faces a lawsuit. It covers court fees and medical expenses if someone suffers an injury in your rented home or apartment. Every policy has a different limit.
If you have a certain breed of dog, you may want to get a personal umbrella liability policy on top of your renters’ insurance plan.
ALE
Additional living expenses (ALE) refer to the costs you face if your property is damaged and you have to live somewhere else temporarily. It essentially covers the cost of items you would have to pay for while your rental property is being repaired or rebuilt (like hotel bills and restaurant meals). There are usually maximum dollar amounts and time limits associated with ALE payment eligibility.
Look closely at what is and is not covered by a renters policy before signing up for one. You can always talk to an agent and make adjustments to your coverage.
Did you know? While 95% of homeowners have some form of homeowners insurance, only 41% of renters have renters insurance, according to a recent Insurance Information Institute poll. That means nearly two-thirds of renters don’t have the protection they’ll need if disaster strikes. That’s particularly concerning because rental rates are on the rise. A Pew Research Center analysis of Census Bureau housing data reveals that the share of U.S. households renting is at its highest point (36.6%) since 1965.
Can I get discounts on renters insurance?
According to Insurance.com, renters insurance policies are inexpensive. On average, they cost renters nationwide about $17 per month.
Depending on the insurance company you choose and the state you live in, You may qualify for discounts on renters insurance. Look for homes and apartments with security alarms, smoke detectors, deadbolt locks, fire sprinklers, and fire extinguishers. If your home is lacking some of these features, talk to your landlord. Making your place of residence more secure could help them save money, too.
You can score discounts on renters insurance by setting up automatic direct payments from your checking account or paying a year’s worth of premiums upfront. Certain groups of professionals — like police officers, firefighters, teachers, nurses, credit union members and retirees — may qualify for discounts as well.
Since your credit score affects your insurance costs, try to clean up your credit. Contact your insurance provider if your score improves substantially. You can also pay lower premiums if you raise your deductible.
Final word
No rule says you have to rent from a landlord that requires tenants to have renters insurance. And you probably won’t have trouble finding a landlord who doesn’t call for it. Just keep in mind that if your landlord doesn’t ask you to sign up for renters insurance, their policy won’t cover the cost of damage to your personal possessions (or living expenses in the event that you have to relocate following a natural disaster).
By investing in renters insurance, you won’t have to shoulder the cost of potential losses on your own. A renters policy offers financial protection and peace of mind, leaving you less vulnerable to theft, tornadoes, earthquakes, and fires. After all, things happen, so it’s best to be prepared. What’s more, renters insurance is affordable. You won’t have to pony up much money to get the amount of coverage you need.
Lastly, Hippo partners with multiple national renters’ insurance companies and these independent agent partners can help determine the best policy that fits your needs. Just give us a call at (877) 838-8866, or you can always email our team at [email protected] about the right coverage for you.
