It’s not uncommon for a landlord to require tenants to have renter’s insurance as part of the lease. Renter’s insurance provides coverage for a renter’s property in cases of flood, fire, storm, and theft.
Here are four great benefits of your tenants having renter’s insurance:
1. Provides coverage for a renter’s personal possessions
A homeowner’s insurance provides coverage for the building, it won’t cover a tenant’s possessions. Having your renters carry their own insurance is extremely beneficial to them, so it’s not an unreasonable request to make of your occupants.
2. Offers liability protection
If a tenant’s possessions get damaged due to plumbing issues or something related to the property, they’ll want to be compensated for the cost of replacement. If they’re insured, they’ll be less likely to sue their landlord for the damages.
3. Maintains the landlord-tenant relationship
If a situation does arise, having a third-party involved provides a buffer for the landlord and tenants. A costly event doesn’t have to ruin your relationship with renters, and renter’s insurance allows you to keep on good terms.
4. Reduces risk and cost
If a tenant causes damage to the property, renter’s insurance may help cover the costs. The homeowner can reduce the number of claims they file with their own insurance, which saves a lot of money in the long run.
While you may be tempted to forgo requesting that your tenants have renter’s insurance, it can save you and your tenants quite a bit of money in the long run. Use it as a tool to prevent contentious situations that can arise from property damage and to increase the profitability of your unit.