Should Landlords Require Renters Insurance: Three Reasons Why It May Be Beneficial


If you’re a landlord who doesn’t require tenant renters insurance, check out these three reasons as to why and how requiring it may actually benefit you.

For most young or first-time renters, renters insurance is a complete afterthought (if it’s even a thought at all). Most folks either underestimate the value of their personal belongings or incorrectly assume that a policy held by the landlord will cover them in the event of an incident. In reality, this is often untrue. 

In most states, landlords have the option to require renters to have their own insurance. But, should landlords require renters insurance? We vote yes. If you’re a landlord who’s still on the fence, consider these compelling reasons as shared by The Cincinnati Insurance Companies.

1. You can be protected from damage to your property.

If there’s a covered accident, for example, a fire, your building policy would pay the losses to the dwelling or building. However, if the fire was caused by your tenant’s cooking mishap, the tenant would be liable, or responsible, for the loss. If the tenant has a renters policy, they could have some coverage for this loss. If the tenant does not have a policy to adequately cover their personal liability, a claim could be made against your policy that could also affect your premium. 

2. You can mitigate the risk of renters having pets on the premises.

As a property owner, if your tenant’s pet causes injuries to someone on premises, you could be held liable for the claim. Requiring a renter to carry their own renters insurance can help mitigate the risks of pets with dog-bite liability and property damage coverage. By requiring tenants to carry insurance, you can market your property more freely to include pet owners.

3. Protecting your own policy from large or multiple losses.

Insurance is a vital tool for protecting your financial well-being from large, unexpected losses. But having frequent claims (from potentially multiple different properties) can increase your premium and even make it harder to obtain insurance. By requiring tenants to carry their own insurance, you may lower unnecessary claims against your policy simply because the tenant does not have their own coverage. By requiring tenants to carry their own insurance, you may lower unnecessary claims against your policy simply because the tenant has their own coverage.

Bonus: You may also consider requiring tenants to list them as an additional interest on the tenant’s policy to make sure it stays in force with adequate coverage limits. 

As a landlord, it’s your call as to whether you’ll require proof of renter’s insurance along with the signed lease agreement. Before making any final decisions, we do recommend consulting with legal counsel to confirm compliance with any state and local laws around requiring tenant’s insurance. And of course, always be sure you personally have the insurance protection you need as the property owner. If you’re in or around Rochester, NY, reach out to The Feltner Group to start exploring your coverage options.