Why Do Landlords Require Renters Insurance?

Why Do Landlords Require Renters Insurance

You’ve just found the ideal place to rent. It’s close to work, has an amazing view, and comes with a bunch of other perks. But, one thing you might not have thought of is “will my landlord require me to have renters insurance?”

They might have told you your application looks good, and with a down payment, you’re all set to move in. But, in some cases, they might also require you to get renters insurance before finalizing the lease. That may make you wonder, can landlords require renters insurance?

The answer is yes, landlords can require their tenants to buy a renters insurance policy — and most likely will insist on it.

According to the Insurance Information Institute (III), renters insurance will help the landlord avoid possible disputes, and legal repercussions should a tenant’s personal belongings become damaged or if there’s an incident causing a liability claim at the rented premises.

So, if you’re a renter and you’ve been wondering to yourself, “is renters insurance required,” below are 7 reasons why landlords do require it.

Why Do Landlords Require Renters Insurance? 

There are many reasons why requiring renters insurance is common, including:

1. Reduces a Lawsuit Risk

Your landlord’s policy will not likely cover your personal belongings if they become damaged, according to Nolo. It also might not cover an individual becoming injured because of your carelessness. This is why it’s a good idea for tenants to obtain renters insurance, since it:

A Renters Policy can cover:

  • Damage to furniture, clothing, and other personal items
  • Your personal belongings, whether they’re in your home or elsewhere
  • Personal liability for another’s injury or their property if damaged by children, pets, and more.

2. Helps Landlords Find Responsible Tenants

If applicants claim they can’t afford to pay for renters insurance, it’s likely their credit score won’t meet the landlord’s requirements.

If potential tenants can’t pay a monthly renters insurance rate and provide proof of coverage, landlords are putting themselves also at risk by renting their property to tenants who pay their rent on time or in full. Whether required to or not, a lot of renters pay for renters insurance for their benefit. It’s a wise thing to do.

Therefore, if landlords come upon situations where tenants can’t afford the extra cost or just don’t care to get a renters insurance policy, it might be in the landlord’s best interest to pursue other applicants.

3. Keeps Landlords from Having to Pay for Accommodations

A landlord might not wish to pay for temporary living accommodations while a tenant’s apartment is being repaired or renovated due to a fire or other catastrophic event damaging the rented premises.

However, if the renter has a renters insurance policy, their insurance provider might cover this temporary living arrangement.  See your policy for coverage details.

4. Protects the Landlord if there is Property Damage

If there’s a fire or some other type of accident that causes damage to the rented premises and the landlord’s insurance will not cover this damage.  The tenant’s renters policy may respond and pay for the landlord’s repairs.

Requiring tenants to purchase renters insurance will give the landlord peace of mind there’s a recourse to cover these losses.

5. Appease the Insurance Company

The landlord’s insurance provider might demand the landlord to make renters insurance a requirement and have tenants provide proof of coverage at each renewal of the tenant’s lease.  This requirement takes the responsibility off the landlord (and the insurance company) and places it on the tenant, helping to avoid a messy lawsuit.

6. Helps If You Live in a Pet-Friendly Space

If you have renter’s insurance, the landlord may be more willing to allow pets. Renters insurance can help cover the costs of things like a dog bite liability or property damage caused by an animal. The details of what the insurance covers will depend on things like:

  • State
  • Type of animal
  • Insurance provider
  • Policy coverages & exclusions

The landlord will want to check your policy to see if it covers these costs first since some insurance policies are a bit more restrictive than others in covering pet-related claims.

So, to sum it up, can apartments require renters insurance?

Yes, they can – renters insurance offers landlord’s substantial legal protection. If a tenant or a guest becomes injured in your apartment, the landlord will not have to worry about being sued for damages. Renters insurance often covers liability without the need to bring the landlord into legal proceedings.

Furthermore, it enables the landlord to recoup the costs of any damages that could be your responsibility.

If there’s water damage or a fire in your apartment because of something you caused due to your negligence, even if this damage spreads to other units in the building, the landlord’s insurance will pay for the repair costs. When you have renters insurance, it can reimburse the landlord for those costs.

Aside from that, you’ve worked hard for your belongings. So, if the landlord requires renters insurance, that could be a good thing. If there’s damage or someone breaks into your unit, you risk losing precious items like high-priced jewelry to expensive electronics. Renters insurance could help pay to replace valuable items like these in a covered event.

For a no-obligation renters insurance quote, call Insurance Center of North Jersey at 201-525-1100 today.