Can Landlords Require Renters Insurance?

Renters insurance is something which many landlords don’t require and still even more renters don’t have (and don’t think they need it).

Why does that matter?

Renters insurance protects a tenant’s belongings in the case of a variety of situations, giving them a sense of greater security while living in your property. 

Why does that matter for you? 

A bad experience while living in your property looks bad on you, whether it was your fault or not.

With renters insurance, you’re able to give your tenants greater peace of mind and improve their overall impression while living under your roof. 

But the benefits don’t stop there. 

Read on to learn more about renters insurance, why you should consider requiring it, and what the benefits are of having it for both you and your tenants.

Can a landlord require renters insurance?

Whether a landlord can require renters insurance depends on what state the property is in.

In California, landlords are allowed to require renters insurance (though renters insurance itself is not required), but in many other states you can’t. 

To find out if you’re allowed to require renters insurance in your state, contact your insurance provider to be 100% certain.

Is renters insurance a necessity?

You may be able to require renters insurance, but is it truly a necessity? Why would you want to require renters insurance for your tenants?

Renters insurance isn’t a true necessity, but not having it is a big risk. Not only for your tenants but also for you.

Let’s talk about why in the next two sections. 

What does renters insurance cover?

Renters insurance covers a variety of situations.

Before we cover the specific benefits, let’s talk about basically what renters insurance covers.

Keep in mind that what the policies you’re offering cover may differ from this list, so contact your insurance provider to make sure you’re clear on your own policies. 

However, renters insurance typically covers:

1. Liability due to injury

In the case of an injury by a guest visiting the property, your tenant would be liable. Renters insurance typically covers any form of injury incurred by a guest while on the property. 

2. Damage from natural disaster to tenant’s belongings

This includes any tenant belongings such as electronic devices, furniture, kitchen appliances, jewelry, vehicles, and more in the event that they’re either damaged or destroyed. 

3. Theft

Similarly, if a tenant’s belongings are stolen, or the property is damaged, as a result of theft, renters insurance typically covers the damages. 

4. Property damage due to negligence

Damage to the property due to negligence can be covered in some cases depending on the policy.

What are the benefits for landlords?

Why should you care about having renters insurance? 

So far, we’ve talked a lot about the benefits to tenants. But what are the benefits of renters insurance to you? 

Here are a few: 

1. It protects you from lawsuits

Easily one of the biggest reasons, having renters insurance protects you from lawsuits in the event that your tenant’s belongings are damaged within your property, whether due to:

• A fire
• Earthquake
• Or other natural disaster. 

And before you think your liability insurance will cover you in this type of event, it likely won’t, even if the tenant is injured due to their own actions. 

2. It protects you from paying for property damage

Similar to a lawsuit, you could be sought by the tenant to pay for damages to the property in the event of an accident if they have no way of covering it.   

No matter what you think of your tenants, it’s better not to assume how they’ll behave after a disaster and instead require renters insurance to cover you even further.

3. Keep your insurance premiums down

If your tenants not having renters insurance means you’re more likely to be hit with a lawsuit or damage claim, that can lead to other issues. 

One issue is that being hit with a claim can increase your insurance premiums. 

And rack up multiple claims? Your insurance provider could cancel your policy altogether.

4. Increase your number of applicants by accepting pets

What does renters insurance have anything to do with allowing pets?

Renters insurance can cover the property damage resulting from having pets as well as liability in the event of dog bites. 

However, make sure to check with your insurance company to make sure what the renters insurance policy you offer covers as some don’t offer pet-related coverage.  

How to convince your tenants of the value of getting renters insurance

We touched on this above, but it’s worth having its own section.

A renter might not initially think of having renters insurance, but that doesn’t mean they won’t value it in the event of damage or loss.

After all, it’s your property, not theirs and they may feel that they don’t have enough physical belongings to justify the insurance. 

But there’s more reason to have it than they might at first realize.

Here are some reasons that should convince your tenants to get renters insurance. 

Landlord compensation

What happens in the event of a claim if you choose to require renters insurance, and your renter doesn’t get it?

In many cases, you can actually sue the tenant for failure to abide by your lease agreement and get the cost of your insurance deductible back.

Neighboring tenant compensation

Similarly, if an event caused by your tenant leads to the damaging of a neighboring property, both you and the owner of the neighboring property can sue the tenant for damages. 

Renters insurance can, again, cover your tenant for damages here as well.

Liability coverage

Tenants may think that renters insurance only covers their physical belongings in the case of an accident or natural disaster.

However, it also provides liability protection. We covered some examples above, but there are several more events where the policy may cover damages. 

For example:

• If a guest or service person is injured while visiting the property or unit
• Or damage caused by their pet to a neighboring property

Knowing that they’re covered in all of these events will give your tenants more peace of mind, which is something many will jump at the chance to get. 

How to discuss renters insurance with a renter / benefits to renters

Now that we’ve covered some of the benefits of renters insurance to tenants, let’s talk about some basic tips that should help you get your tenants to adopt it.

It might sound a bit awkward and hard to talk about getting insurance whose primary benefits are protecting them from the monetary loss of their belongings and liability from lawsuits and the like.

However, both are compelling enough cases that you can present it in a way that shows your tenants it has value for them.

Having said that, here are some tips for effectively communicating with your tenants about getting renters insurance: 

1. Focus on the benefits

To some this might sound obvious, but if you’re not doing it you’re missing out on the biggest selling point by far.

Clearly display the benefits, in bullet point style, on a flier, a banner, a landing page, or simply in conversation.

Make it simple enough to clearly understand the value without droning on about it. 

Focus on language that makes it clear that you’re talking about the value it has to them, not to you or anyone else. 

They’re going to be thinking about it from the perspective of, “what is in it for me?” so make sure to give that to them sooner than later and make it compelling using what we talked about above. 

2. Make it convenient

One of the biggest hurdles to getting your tenants to adopt renters insurance is to make it hard to get. 

With DoorLoop, soon (end of 2022) you’ll be able to offer renters insurance to your tenants with a sign up process that takes just minutes.

And the best part is, they’ll be able to do it from the same dashboard they pay their rent.

Even now, your tenants can easily upload a copy of their renters insurance policy to a convenient tenant portal in seconds, making it as frictionless a process as possible. 

3. Show how affordable it is

Renters insurance is highly affordable, so use that as a selling point and don’t shy away from mentioning the price until the last minute.

The biggest barrier to adoption will be the price, not the reasons for having it. 

So, after listing the benefits, mentioning the low price will make it clear that they have nothing to lose for several useful benefits.

Protect you and your property with renters insurance

Renters insurance provides a number of great benefits to landlords that you may not have realized. 

Plus, the combination of benefits and low price your tenants can take advantage of means they have very little to lose in getting it and much to gain. 

So, use the points we talked about above to make your renters insurance policy compelling and enticing.

As a result, you’ll be covering yourself in a myriad of ways that your liability policy either may not or does not cover you and your property.