Renters Insurance???

Question

We have rental units of various types (Multifamily - a 6 unit and a 10 unit, Duplexes, SFHs, and a couple condos).

Our rental agreement clearly puts all liability for accidental disasters on the tenant (worded well). We have also made any rental/liability insurance carried by tenant optional (again, it's clear that they are on hook for any disasters created by them).

We are properly insured with separate HO and Liability Policies on all property.

Had a situation where tenant left tub running at condo causing 7k in payouts to us and neighbors. Tenant does not have insurance. Insurance co is subrogating to tenant. They'll be on hook for 7k to insurance.

MY QUESTION: Do you require and/or periodically follow up on Tenant's Renter Insurance to protect them? If so, are you selective on which type of property to do so at?

Thx!!!! Debating this with partners. Appreciate your thoughts...

Greg M. · Answer

Just your name and address. It's possible that your tenant said Additional Insured and the insurance carrier might need more info for that. However, if they said Additional Interest, that is a super common request from tenants and I've never heard of an insurance company asking for personal info like that. If your tenant is saying that the insurance company requires all that info, I'd get the name, tel, and policy number of the insurance company and call them myself.

Lynn McGeein · Answer

I've started making it mandatory that they carry renters with minimum 100K liability with me listed as additional insured for new tenants, and I have them bring a copy of the policy when they get the keys, along with proof of utilities.

Jeff Duford · Answer

@Lynn M. or @Bryan O. i know this post was from 3 years ago but relevant to what i'm looking for so was wondering if either of you could help explain to a relative newbie....why do you require the insurance list you as an "additional interest"? how does this further protect you as the LL? Thanks so much...

Greg M. · Answer

People listed as Additional Interest are supposed to be notified of changes in the policy terms or cancellation of the policy for whatever reason. Anyone can file a liability claim against the policy, but as a landlord you want to make sure the policy is active at all times.

Sohrab Khosravi · Answer

@Bryan VinceWe make it a requirement and we add an amendment to the lease they need to bring us a copy of the insurance with our name on it or we will buy it for them (my PM software, Appfolio will do that) and add it to the rent. I know this might not work for some rental properties.

Spencer Gysi · Answer

Makes sense, thanks.

Spencer Gysi · Answer

@Greg M. What info do insurance companies usually need to add the landlord as additionally insured? I am having my tenant add me to their liability coverage and they says the insurance company is asking for social, DOB, occupation, etc. That seems too much to include the social.

Christine Kankowski · Answer

We require renters insurance and proof there of before we give key. WE also require them to keep it updated and we do require prrof of that. We do keep track...

Ian I Leinwand · Answer

For my personal properties and the properties my company manage our lease states the tenant must have renters insurance. However, it is very hard to follow through on compliance if tenants are left to purchase rental insurance themselves. My team and I are currently deciding on a renters insurance policy we would purchase for each unit through our property management software for $15 a month. My challenge is figuring out the best way to build that cost into the management of the property. Do we bill tenants separate from rent, add it into the rent payment and deduct from the property owner, have tenants pay for a year upfront as part of leasing fee? Can we make it mandatory to purchase the insurance through our company (ensuring compliance) or do we have to give the option for a tenant to find and provide proof of their own insurance? I think there is tremendous value in a policy for $15 a month. Currently, for most properties, we manage a deposit equal to one month's rent would not cover much if a tenant intentionally or unintentionally damaged the property. It also covers a tenant's personal property.

Michael J Callinan · Answer

Everyone of my tenants is required to have renters insurance. I explain to them that it not only protects us it protects them, sometimes even more so. If we have a year lease then at renewal we need updated renters insurance policies to continue to rent. Anything that is related to the tenant causing damage should go on their policy-mistakes unfortunately happen.