Renters Insurance

[Ty Whitman]

I'm getting ready to rent out my first few rental homes and have been on the fence with the subject of requiring renters to get renters insurance.  It seems like many leases I have looked at require it, but I fear that forcing it on tenants may scare some otherwise good people away.  I also try to put myself in the tenants shoes and I kind of think it feels like an unnecessary demand, when I am already saying "no pets", "no smoking", "no persons in the rental not on the lease", "no parking on the lawn", etc....  

I would really appreciate some of your opinions on the subject.

[Mary Joe]

Originally posted by @Ty Whitman:

I'm getting ready to rent out my first few rental homes and have been on the fence with the subject of requiring renters to get renters insurance.  It seems like many leases I have looked at require it, but I fear that forcing it on tenants may scare some otherwise good people away.  I also try to put myself in the tenants shoes and I kind of think it feels like an unnecessary demand, when I am already saying "no pets", "no smoking", "no persons in the rental not on the lease", "no parking on the lawn", etc....  

I would really appreciate some of your opinions on the subject.

 You are not scaring good tenants away, you are attracting good tenants.  Those who are good tenants will understand and comply.   

No pets, no smoking etc isn't going to be sufficient.   What if your tenant claims that his belongings were stolen when the exterminators were at the house?  If your tenant has his  own renter's insurance, he can file a claim with his insurance company, otherwise your tenant may come after you, the Landlord.  

You also need an extra layer of 3rd party liability protection so that your tenant's policy will be invoked first before the claimant comes after the landlord.

Renter's insurance is a must have in my opinion, but how to ensure that your tenant will comply  is a totally different story.    

I suppose you can add a clause in the contract that for every month without renter's insurance, you will deduct a certain amount from the security deposit,  although you probably should check with your state to see if that is legal first.