There is a common myth out there that is believed by many that as long as one person has insurance…. everyone is covered!
When speaking about a home in general, lets take mine for example. I have home owners insurance, if a fire breaks out it covers the repairs and replaces “hopefully” all that is lost that can be replaced. But that isn’t necessarily the case when it comes to rental properties. It is becoming increasingly more common for management companies and owners of rental properties to require tenants to have renters insurance. Here are the top reasons why:
- If your tenant somehow causes someone else to be injured (maybe they got into a fight, or the kids were playing tag) their renters insurance will provide the protections to compensate the injured person. This could protect you from a possible liability suit.
- If something happens, and the tenants property is damaged. Like in a fire (not caused by the tenant) Home owner’s insurance on rental properties does NOT usually cover the tenants personal property. It will fix the home, but not compensate them for their property. (Basically, your insurance covers YOUR loss and not your tenants) Many tenants don’t fully understand this, and assume that you will pay for their lost items in this type of situation.
- Many tenants can get “multiple policy” discounts for having renters insurance. A good friend of mine signed up for renters insurance through her auto carrier. It cost her roughly $9/month to cover her belongings. Her auto insurance actually went down $15/month because she now had multiple policies!!!
- Some renters insurance policies will actually cover certain items when they are lost. Such as a wedding ring or violin. The same thing could apply to theft of property as well.
- Did you know that in a lot of circumstances, if a tenant is unable to stay in a home, (again, lets say there was a fire) It isn’t necessarily the landlord/managers responsibility to provide temporary housing. Renters insurance will usually cover that as well.