Do You Require Tenants To Carry Renter's Insurance? Why?

[John White]

Good Evening...

I've seen a lot of leases where the property owner requires the tenant to show proof of Renter's Insurance.  Is this something that you do?  Why?  I guess the real question is what impact does it have on me as a Landlord, if something were to happen, and a tenant opted not to have insurance.  Obviously, we all understand that our investment properties are only insured for the dwelling (s), and not contents. I just want to know if this is something that I absolutely should require, and if so...why? 

[Eric Narcisco]

John, most landlords want proof of coverage at lease signing and renewal, but that does you no good if the policy cancels halfway through the term.  You can and may require that tenants list you as an "additional interest," which would give you notification of cancelations, lapses, non-renewals, and renewals.

Additional interest doesn't provide you any coverage, of course, beyond the liability coverage on the policy, but it certainly puts your mind at rest.  Those sound like Class A units you're renting, so intentional non-pay cancels are unlikely, but people do forget things once in a while so it's good to have.

It's usually a bit more expensive to spread out payments on the policy, but most companies will do it. The national average is around fifteen dollars a month.  But with renters insurance as inexpensive as it is, there's really not much reason to do monthly payments for most people renting at that price point.  But it's an option.