More and more property owners require their tenants buy renters insurance. Can they do that? Why do they do it? And should you get one of these policies even if your landlord doesn’t require it? You’ll find answers to all those questions and more here.
Many property owners now require tenants to buy renters insurance. After all, it protects landlords from accidental damage and potential lawsuits. But is it legal for a landlord to require renters insurance? Yes -- although of course there’s more to the situation than that.
You’ll learn more about that here. And you’ll find answers to these related questions, too:
The short answer here, as you’ve heard already, is yes. Landlords and property owners can require renters insurance. And not only that, but they can force you to prove you have it.
They don’t do this because federal or state law forces them to do it. In fact, there are no laws that require people to buy renters insurance.
But there are laws that require renters to follow their lease. And if you sign a lease for an apartment, condo, or house that says you need to maintain renters insurance coverage, you’ve got to do just that. And if you don’t, you could be evicted, fined, or punished in some other way, per the lease.
What to know more about your rights in this and other, similar situations? Read our article about tenant-landlord law and renters insurance.
There are all sorts of reasons landlords make tenants buy this type of insurance.
As you might expect, most of them benefit the property owner in some way. Almost all of them benefit renters, too, though.
If you ask your landlord why they require renters insurance, you’ll probably hear something along the lines of, “it’s for your own good.” A renters insurance policy will protect you if something happens to your stuff or if someone gets injured in your home. This is just the tip of the iceberg as far as the benefits of this kind of insurance are concerned. Keep reading to learn about more of them.
That’s not wrong. But it’s also not the only reason why many property owners require renters insurance. Here are a few others:
To put it another way, it makes you less likely to sue them. Why would you sue them? Let’s say your lease doesn’t make you buy renters insurance. And then let’s say something happens to your possessions. Maybe they’re damaged or destroyed due to a fire in another apartment unit. Without this kind of coverage, you might sue your landlord, claiming he or she is in some way responsible for the loss. With it, though, you can just file a renters claim on your own policy and call it a day.
In some states, property owners have to pay for tenants to relocate if a fire or natural disaster makes their home uninhabitable. If you have your own renters insurance, though, you won’t need to rely on that. Most policies cover some temporary living expenses while you wait for unit repairs.
Yes, property owners need to have insurance, too. And if they file a claim on their landlord policies, their premiums may increase. Worse, their policies may be canceled. How does you buying renters coverage help in this situation? Well, imagine something happens to your apartment or condo building., If you file a claim for your own damaged property, it could keep the landlord’s claims to a minimum. Their insurance won’t have to pick up the bill for your stuff, which makes them less likely to raise your landlord’s rates.
Should you damage the building or complex, your landlord’s insurance policy will pay for structural repairs. But they may still have to deal with the policy’s deductible, though, and that can get pretty pricey. If you’re responsible for the damage and you have renters insurance, it’ll cover that amount.
This isn’t about your insurance helping your landlord clean up any messes your pet makes while you’re a tenant. Your security deposit covers those costs. So how does having a renters policy help in this situation? It helps your landlord from a liability standpoint. If you don’t have renters insurance, a visitor could sue your landlord if your pet bites them. On a related note, not all renters policies cover these sorts of injuries. If you have a pet – a dog, especially – and you need renters insurance, make sure it covers you if your canine pal bites someone.
How so? Consider this: if a property owner requires renters insurance and a prospective tenant can’t afford the $13 to $25 per month it costs, the person may be living paycheck to paycheck. It also suggests the landlord might have to deal with a few headaches down the road. After all, if $200 or so (for a year’s worth of coverage) is too much for a renter, the same may be true of their rent should some problem arise.
They will be able to spend less time worrying about a tenant suing them for problems they didn’t cause. And on the flip side, they should be able to spend more time doing things that’ll keep your apartment, condo, or house a great place to call home.
There’s no telling just how many landlords make tenants have renters insurance, unfortunately.
What can be said is that more and more of them are requiring it. Even suggesting “many” or “most” do it isn’t out of the question at this point, based on numerous media reports.
Because they don’t have to require it, though, some decide against it. Which means you should be able to find a property owner that leaves the choice up to you, if that’s what you want. You certainly wouldn’t be the first person to not like being forced to do something.
At the moment, no states require tenants to buy renters insurance.
But some states have laws in place regarding renters insurance. They may, for example, restrict landlord requirements for low income or public housing tenants.
If you’re unsure how your city or state treats this issue, contact your city’s housing and community development department. (Or whatever they call the equivalent where you live.)
Or contact your state’s authority on the matter. That may be the attorney general’s office, or it may be a department like consumer protection or consumer services.
Stumped as to where you can find this information? Check out the “tenant rights” page of hud.gov, the US Department of Housing and Urban Development’s website. It’ll direct you to the right person, office, or organization.
Yes, you’re most likely to see this requirement pop up as a clause in a rental lease.
The wording can differ from lease to lease or landlord to landlord, though. Keep that in mind when you go to rent a unit or property.
For example, you may see something like this on a lease, according to State Farm: “Lessee is required to provide proof of renters insurance within 14 days of the lease start date.”
Some property owners give tenants as many as 30 days to prove they’ve got renters insurance, by the way. And others require it on day one, or before you even move in to your new home.
Also, you’re not out of the woods if you’ve already signed a lease that doesn’t require renters insurance. And you’re not out of the woods if you’re renting month to month, either.
Landlords can add requirements like this to a lease as long as they let you know about it far enough in advance. It also lets them change the terms of month-to-month agreements with proper notice.
Also, your landlord may also require you to name them as an “additional insured” on your insurance policy.
Some do this so they’ll get a heads up if you ever cancel the policy, or if the insurer cancels it for you due to late or non-payment. It can also make it easier for them to collect on a claim.
You might get evicted. The same may happen if you get a policy and then let it lapse.
This is why some property owners also require you to add them as “additional insureds” on your renters insurance policy. That ensures they’ll hear about it if you cancel your coverage or if it’s canceled for you.
In other words, don’t try to pull a fast one on your landlord by proving you have renters insurance and then turning around and dropping it. He or she is sure to find out about it even if you don’t name them an “additional insured.” Most landlords who require this coverage ask you to prove you’ve still got it at renewal time.
Yes, you should. Why? For starters, renters insurance covers your personal belongings. That TV you love so much? Or that laptop? Or that game system? You’ll be able to replace them if they’re stolen or if they’re destroyed by fire, wind, vandalism, and more if you have renters coverage. And you’ll be able to repair them if they’re damaged by any of those perils, too.
You won’t be able to do that if you rely on your landlord’s insurance. That only covers the structure of your rental unit – the walls, ceilings, and floor -- and things like appliances that come with the place.
Will renters insurance cover all your precious possessions? Probably. Most policies provide between $15,000 and $30,000 of coverage. That said, they sometimes limit claims to $1,000 per item. If you own anything worth more than that, you need to get a floater or rider to cover it.
Renters insurance does more than repair or replace your belongings if they’re damaged, stolen, or vandalized. It also pays some of your living expenses if your apartment, condo, or house become uninhabitable due to a “covered event.” (Your policy will give examples of these.) And it provides a certain amount of personal liability coverage.
The cherry on top: renters insurance is cheap. Most plans cost between $150 to $300 a year.
If you’re a renter, there’s a good chance live in a building with others. Whether it’s an apartment, condo, or house, rental units often have many people under one roof. No matter how careful you are, someone else can cause an accident that damages your stuff. Whether it’s letting a bathtub overflow or knocking over a lit candle, accidents happen. It doesn’t cost much to protect yourself from such situations.
For more information on what these policies cover, read our article about renters insurance basics. And see this article of ours, “What Renters Insurance Doesn't Cover,” for the other side of the story.
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