Why is Requiring Renters Insurance so Important??

[Kurt Bender]

We started requiring our tenants to have renters insurance a couple years back, and I'm so glad we did. We already had one situation come up where our renter plugged the kitchen sink with the faucet running, stepped away, feel asleep, and it ended up overflowing and damaging the cabinets and the unit underneath. The damage ended up being about $10K and our tenants insurance covered it in full. 

My question is: Does it matter to have the landlord listed as "additional insured" on the renter's insurance policy or does it benefit us landlords in any way? I know being listed as an "additional interest" would notify us if the policy is cancelled for whatever reason. 

[Daniel Preston]

Licensed P/C agent.

Simple answer is... it doesn't hurt you and shouldn't cost them anything.

You've already experienced the benefit from the property standpoint. Being an additional insured (AI) helps more on the bodily injury (BI) / liability exposures. For example, your tenant has people over for drinks, one gets wasted, falls in your tenants unit and gets hurt. Being an AI on your tenants policy can help with both the BI payments or defense costs (defending your negligence).

I'd make it mandatory if I were you. You can have them evidence it through certificates of insurance. That's my 0.2 cents.