As a landlord, you have a lot to worry about during the course of any given month. The safety and security of your tenants’ possessions, however, shouldn’t be one of them. Many tenants mistakenly believe that a landlord’s insurance policy will cover any possible damage; this can lead to potential lawsuits and other complications. But by requiring your tenants to have renters’ insurance, you can avoid these potential legal pitfalls. Here are some more reasons why you should require renters’ insurance:
Liability coverage
For starters, renters’ insurance often includes liability coverage of its own, which can reduce your landlord insurance policy costs. This can, in turn, mean that you can keep rents more manageable and offer a more appealing rental to prospective tenants.
Avoid lawsuits
As we said before, requiring renters’ insurance can be one of the most effective ways of avoiding lawsuits. If a tenant’s belongings suffer damage and they lack renters’ insurance, chances are they’ll try to hold the landlord responsible. Renters’ insurance, however, will take care of any damage that occurs to a tenant’s belongings.
Weed out bad tenants
If you tell a potential tenant that they must have renters’ insurance, but they say they can’t afford it, that’s a big red flag that they may not be the best tenant. Renters’ insurance is relatively cheap (typically $20 per month), so if a potential tenant can’t afford that, chances are they’ll have difficulty paying their other bills, too.
There are some legalities that you will need to consider before requiring your tenants to seek renters insurance policies, including on the proper way to include requirements in lease agreements and what your rights are under the law. Aaron Cox Law can sit down with you and explain your rights as a landlord and help you decide on how best to speak with tenants about renters’ insurance. Call us at 734-287-3664 today to learn more about the services we provide for both landlords and tenants.