There are several reasons why landlords should require tenants to carry rental insurance. The greatest benefit, in a nutshell, is that rental insurance will take care of the tenant’s financial needs during crises – and when the resident is covered, the landlord is less likely to be targeted. When renters run out of money, they frequently seek out the owner, which needless to say, could become very time-consuming and costly for that person. Most people are aware of the benefits renters insurance provides to tenants, the way it protects their finances in the case of emergencies, but property owners are perhaps not as aware of the way requiring the coverage can help them. The following is a list of some of the most important benefits.
Requiring renters insurance…can keep landlords out of court. It causes them to invest in the protection of their own property so that they do not have to rely on the property owner. Tenants could sue the landlord in such cases as when their possessions become damaged by a leaky roof or from a faulty appliance. They may also sue if they, or one of their guests, hurts themselves in the rental. These renters may be trying to raise money for their medical costs by proving landlord negligence. Even if the property owner’s insurance policy covers the court costs, his or her rates are likely to be increased. Lawsuits are simply less likely to occur if tenants have their own policy, as it provides a safety net for these tenants when something goes awry. Often, landlords find that the claims tenants are making are quite frivolous. However, there’s always a chance that the suit will be validated by the court, and end up costing him or her a fortune.
The Property Becomes Destroyed
The landlord is responsible… in some states, should something happen to the property itself. For example, if a fire or disaster destroys the property, the owner may be legally responsible for the tenant’s loss of personal property and also with providing them with temporary housing. This could turn out to be very time consuming and expensive for the property owner. The tenant’s renters insurance, on the other hand, will pay, not only for their lost possessions but also for their hotel room stay.
Improves Tenant-Landlord Relations
A good policy can improve the overall relationship… between landlords and their renters. First of all, the willingness of prospective tenants to acquire a policy and make the payments on it is often a good sign of the tenant’s faithfulness; of their ability to afford the rent, and their monthly expenses. Having the security of knowing that they will be able to replace lost items is reassuring and relieves some of the inherent landlord-tenant tensions. The protection also extends to the tenant’s neighbors should the tenant, their children, and in some policies, the tenant’s animals, cause a neighbor physical injury or property damage. The insurance will protect the party who suffered the losses, making them less likely to pursue the landlord. The policy will also safeguard the renter if someone should sue your tenant for some reason, and again, will not necessarily need to involve the owner. Additionally, renters insurance includes items that have been rented or borrowed as well as “off-premises”, which have gone missing from a vehicle or hotel room.
Most rental insurance payments are $20 per month…making a policy requirement, a rather reasonable demand. If the tenant adds the renter’s insurance to an auto insurance policy, it might actually reduce their monthly payment. Moreover, the insurance can also cover the homeowner’s policy. Should the tenant accidentally cause damage to the property, the renter’s insurance is likely to pay the homeowner’s insurance deductible.
Landlords should look into the laws of their state to ensure the legality of a rental insurance requirement in the lease.