Renter’s insurance sounds like something that shouldn’t matter all that much to the landlord. You’ve insured the house; the contents and the rest of their personal property are up to the renters. Renter’s insurance, however, does more than just protect the renters’ personal property–and requiring your renters to show proof of rental insurance has a number of advantages to you.
Your property is covered in the event of severe damage due to flood, fire, or other natural disasters. Chances are, you also have something in your insurance policy to cover extreme damage caused by the renters, whether they hit the gas instead of the brake and ran the car into a wall or accidentally let the toilet overflow all night, ruining the entire bathroom. When you file a claim, however, you run the risk of your insurance premiums increasing along with it. Renter’s insurance can take some of the burden off of you, making the renters responsible for damage that was actually caused by them.
Homes Get Damaged
In the worst-case scenario, what if there was a fire due to faulty wiring that caused the property to be destroyed? Without renter’s insurance, your tenants have no recourse for replacing items that were lost in that fire except to come after you. Legally, you might win the case. You will, however, end up paying a number of unnecessary legal fees in the process. Requiring renters to protect themselves offers you a cushion so they’re unable to come after you.
Help Renters Keep Their Money
When a theft occurs, it can be financially devastating for your renters. Many big-ticket items like cell phones, laptops, and tools used for work “need” to be replaced immediately. Others, your renters will consider important enough to replace for their own reasons. When you require renter’s insurance, you ensure that your renters have the means to replace those important items without dipping into next month’s rent–which means that you’ll be more likely to keep getting paid on time.
Prevent Liability Issues
If your tenants cause damage to someone else, you don’t want to be the one who is liable. This is particularly true in the case of individuals who have large dogs or dogs who are known to be dangerous. If they don’t carry liability insurance, chances are, the damaged party will end up coming after you for financial reparation. You don’t want to get caught in the middle of a nasty legal fight. When your tenant has renter’s insurance, you can leave the battle to their insurance company.
You Weed Out Tenants
Most tenants won’t mind paying the fees for renter’s insurance. Renter’s insurance tends to be relatively inexpensive. They aren’t covering the home itself, just the contents, and so can pay as little as a few cents a day for the privilege. Those who raise a fuss over it are probably tenants who are going to cause problems anyway: the ones who complain over the little things, call you to fix every minor bump on the walls in the middle of the night or scramble to come up with their rent money on time every month.
Renter’s insurance has a number of advantages for your tenants, who need to protect their possessions and their bank accounts for the possibility of accident or catastrophe. More importantly, however, it protects you, offering you a cushioning layer between any accidents that occur while the tenants are renting your property. While you can’t write a requirement for renter’s insurance into an existing lease until the term is up, you can add it as a requirement on all of your new leases. Looking for more information about the benefits of renter’s insurance? Contact us today to learn more.