Landlord "Loss of Use" liability?

[Chris Stromdahl]

A friend of mine that owns one investment property recently warned me of the need to require tenants to have insurance due to the "loss of use" liability. 

The main water line to his property recently burst, flooding the entire basement and leaving the property uninhabitable. Luckily his tenants have family they can stay with, but he did not require them to have insurance, therefore they had no loss of use protection.

Question:

Do you require your tenants to have insurance?

In your experience, if a tenant chooses to not carry renter's insurance, is there any liability on behalf of the landlord in a scenario such as this/similar scenario? 

• Just assume the landlord had been keeping the property up and the loss of use was not due to negligence.

Thanks, Chris