Why Landlords Want Tenants to Obtain Renter's Insurance
July 5, 2019
Residential landlords will often include a provision in the lease requiring the tenant to carry renter’s insurance. Landlords do not want be sued by tenants for damage to their possessions and want tenants to look to their own coverage. Tenants often balk at an additional cost and mistakenly assume that they are covered under the landlord’s policy. This is not the case.
In fact, the landlord’s insurance will cover repairs to or replacement of the structure from things from fire, water or storm damage. Damage to or theft of the tenant’s possessions are not covered. Tenants will often believe their possessions are not worth much, when you make an inventory (TVs, computers, clothing, books, mattress, furniture) it adds up!
A common lease provision reads as follows:
“The Tenant shall be responsible for obtaining at Tenant’s own cost and
expense, a tenant’s insurance policy for the Tenant’s furniture, furnishings,
clothing and other personal property. The Tenant’s personal property shall not
be the responsibility of the Landlord, and will not be insured by the Landlord.
The Tenant’s insurance policy must also include liability coverage. Upon
request, the Tenant shall periodically furnish Landlord with evidence of
Tenant’s insurance policy.”
Some savvy Landlords will go further and add:
“Tenant shall provide a copy of renter’s insurance at the time of lease signing
and at each renewal of the lease. Tenant shall provide written notice of any
interruption of Tenant’s insurance during the Lease term.”
This additional provision prevents a tenant from letting the renter’s insurance lapse for non-payment or alerts the landlord if the insurance carrier dropped the tenant. A failure to provide the insurance could be a breach under the lease.
Tenants should consider who is listed on the insurance policy, in particularl roommates and couples, to be sure all occupants’ possessions are covered. Some renter’s policies can extend to possessions damaged or stolen while traveling. A Renter’s policy can also cover a hotel stay or other interim housing if a tenant must leave its rental because of damage.
In conclusion, renter’s insurance is not as costly as one may think and it is a good investment and protection tool for both the landlord and the tenant.