Requiring a tenant to have renter’s insurance is a smart move for any property owner. Here are a few of the benefits of requiring it of all tenants:
- Mitigate the Threat of Lawsuits
The primary reason for requiring tenants to carry renter’s insurance is to lessen the property owner’s chance of being sued. If an uninsured tenant’s belongings are damaged, they may try to sue the owner for reimbursement.
- Reduce Your Responsibility
The landlord’s obligation to relocate a tenant if the leased space becomes uninhabitable varies depending on the specific terms of each lease. Tenants with renter’s insurance do not have the rely on the landlord’s largess for relocation as that is the tenant’s insurance carrier’s obligation.
- Weed Out Questionable Tenants
Prospective tenants who balk at required renter’s insurance are likely tenants you’d rather not have. Renter’s insurance is one the least expensive types of insurance available. If this expense is difficult for them to bear, there may be undisclosed financial concerns.
- Cover Your Deductible
If a tenant inadvertently causes a fire or other catastrophic damages to your building your insurance policy will may cover the repair costs. However, you will be responsible for the deductible, which can be a substantial amount of money. A properly insured tenant’s policy should cover the deductible thereby lessening your risk
- Annual Check Ups
With each year’s lease renewal, be certain to require proof of insurance. Some tenants may allow conditional policies to lapse once they have moved in. Cancelling or allowing a policy to lapse should be grounds to terminate the lease agreement.