You’ve completed your rental application, provided references and written a check for your rent and a security deposit. You’re all set to move in. Then your landlord asks if you have renters insurance.
Renters insurance isn’t a requirement by law. However, more landlords are adding it as a requirement for tenants. The National Multi Housing Council’s 2012 survey showed that over 84 percent of apartment companies required their tenants to buy renters insurance. This was an increase from the figure of 2011, where only 62 percent made renters insurance a requirement.
Why your landlord wants you to have insurance
There are several reasons why your landlord would require you to have renters insurance.
- Their insurance doesn’t cover your personal property or expenses
In case of a fire or any other damage to the property that isn’t your fault, your renters insurance will cover your expenses. Your landlord’s insurance policy only covers the damage to the structure.
- Prevent arguments of liability
In case you are responsible for the loss, property damage or bodily injury of a neighbor, guest or passerby (e.g. because of your pet’s actions, your renters insurance will cover the cost of compensation to the injured party. This prevents arguments between you and your landlord over liability.
- Prevent law suits
Your landlord probably doesn’t want to be sued for damages in case of incidents such as robberies in which they could be blamed for negligence. Your renters insurance will cover the loss of your property and leave your landlord in the clear.
There are two ways that landlords can require you to have renters insurance:
- They can include it as a requirement in the terms of your lease. They can therefore refuse to let out the property to you if you don’t buy renters insurance.
- They can educate you about renters insurance and encourage you to buy insurance to protect your own property.
Finding renters insurance
When your landlord requires you to have renters insurance, what should you do? You have the option of refusing their requirement and looking for a different apartment to rent. Renters insurance is quite affordable. According to the Insurance Information Institute’s 2015 study, the average cost of renters insurance was $188 in 2013. The wisest course of action therefore is to seek renters insurance.
It is important to note that if you already signed a lease with the landlord that did not require you to have landlord’s insurance, they cannot require you to get it. They can however, include it as a requirement in the new lease when the old lease is up for renewal.
It is important to check with your landlord to find out what specific coverages they require before you begin searching for a policy. This will ensure that the policy you choose meets their requirements. Compare renters insurance to ensure that you get the best policy for your needs.
Renters insurance may not be adequate if you own expensive property. This may include electronics and expensive jewelry. You may have to take out additional insurance to protect those high-value items.
It is also important to check the requirements of your state. Some states such as Virginia will require tenants to have a minimum of liability insurance. You should ensure that your insurance meets the minimum requirement of your state.
Some tenants get renters insurance only because they are required to by their landlords. They then fail to pay their premiums and therefore lose their coverage. Ensure that you keep up with your premium payments and avoid having gaps in your insurance coverage. Your landlord may surprise you and ask you for evidence to ensure that your plan is current. Worse still, you may be the victim of a disaster and not receive compensation because you’ve lost your cover.