Tag Archives: Renters insurance

Renters Insurance

The importance of renters insurance is spelled out in this blog.   An owners insurance policy does not cover a tenants belongings, nor does it protect the tenant in any way If a tenant or one of their guests is the cause of the disaster.  It is important for tenants to have renters insurance that will cover all of their personal belongings as well as give protection in case of fault for damages to the rental structure.

Owners can require a tenant to purchase renters insurance. Be sure to check your state laws and guidelines as to the max amount that can be required.  In Oregon, the maximum amount that an owner can require a tenant to have is 100,000.00 regardless of how much the home is worth.  Some states require renters to have insurance to protect the tenants against loss. States that do not currently have this requirement may be changing it soon to protect the renters from having large claims against them if a disaster should occur.

Renters insurance is very affordable usually 10.00 – 15.00 per month. This coverage will protect them in many ways weather at fault or not.  In the case where the tenant is not at fault for damages to the house such as fire started by faulty electrical  or an act of nature like flood etc, their belongings would be covered through their policy. However, in situations where the tenants caused the damage such as fire from negligence etc.  Their policy would cover them, their belongings and the owners structure.  Without this coverage a tenant would still be liable for damages and could be sued by the owner for the loss.  This coverage also comes in handy for tenants if an owner is requiring a tenant to pay for damages beyond wear and tear after move out sometimes the rental insurance policy will pick  up such damages for the tenant.

So you can see why requiring renters insurance is a very good idea and will not usually be a “deal breaker” for tenants interested in renting a home that has such a requirement esp. when it is so affordable.  Owners will want to disclose this requirement right up front and ask for proof of insurance when renters apply and ask for proof of insurance at signing.  It is also important for an owner or manager to ask to be added on as an additional insured to the renters insurance policy so that they will receive renewal or cancellation notices when changes are made.  If you would like to make this change and currently have tenants renting already, remember to wait until their lease term ends and give 30 days notice for them to prepare for the new requirement and provide proof.