Why Landlords Should Require Renters Insurance

In the event that your property suffers damage from accidents, storms, or break-ins, you’ll be happy to have landlord insurance to cover your losses. It’s a regular expense that’s well worth it when you need it.

But what about your tenants? Losses not covered by landlord insurance fall onto them. This is where renters insurance comes into play.

Unfortunately for your tenants, your quote for landlord insurance doesn’t include the cost of renters insurance. In fact, landlords do not purchase renters insurance at all; tenants do.

With that being said, it’s a good idea for landlords to require tenants to purchase renters insurance. In this article, we’ll talk about why.

What Renters Insurance Covers

When your property suffers damage or loss from fires, storms, wind, lightning, vandalism, or theft, your landlord insurance provides financial protection for your losses. Your tenants, on the other hand, aren’t covered.

There are three types of coverage when it comes to renters insurance: personal property, liability, and loss of use expenses.

  1. Personal Property – Tenants’ belongings, including furniture, clothes, and electronics, can be insured if they get stolen or destroyed. With that being said, these belongings require a deductible and are typically subject to a limit. You should encourage your tenants to make a list of their belongings before moving in to decide on an appropriate coverage limit.
  2. Liability – This covers an injury or damage on the property that a tenant is responsible for.
  3. Loss of Use/Living Expenses – In the event that a tenant’s unit becomes uninhabitable, this may cover their hotel bill or certain food expenses while they aren’t living in the property.

Beyond these three types of coverage, a tenant may choose one or more add-ons to tack on to their renters insurance. Examples of add-ons include volcano and earthquake coverage, water backup coverage, theft extension coverage (for items stolen from cars, trailers, boats, etc.), credit card coverage (for unauthorized transactions), or scheduled personal property/valuables coverage (for certain items like jewelry).

Low Cost

Tenants often worry about how much renters insurance costs for them, and many are against it because they think it costs too much. The fact of the matter is that renters insurance is one of the most affordable kinds of insurance, with an average premium cost of $15 per month.

Much like landlord insurance, the cost for renters insurance is dependent on the coverage and deductible your tenant chooses. Still, the average cost of renters insurance, including plans with add-ons, is between $15-20 per month.

It Also Protects Landlords

Renters insurance isn’t just great for your tenants; it also protects you.

One of the nicest things about renters insurance for landlords is that, if your property undergoes accidental damage or loss and your tenant has renters insurance, their insurance policy will kick in before yours. This decreases the chance you’ll have to interact with your insurance company, saving you a hassle.

Renters insurance also helps prevent lawsuits from a tenant in instances of theft or damage. If a tenant’s losses are adequately recovered by their renters insurance policy, they’re less likely to blame or even sue you.

Easily Available

Because renters insurance is considered a fundamental part of the property rental business, it’s often offered as a secondary feature on many property management software platforms. Platforms like Innago, Avail, Appfolio, Buildium, and Doorloop partner with an insurance provider for their renters.

Property management software allows you to approve preexisting policies or get tenants set up with a new policy. Furthermore, if you require renters insurance, you can monitor the status of each policy with property management software to ensure that all your tenants are properly insured.


You never know if your property might incur accidental damage or theft, so it’s always good to be prepared. While landlord insurance covers your property and building structure, your tenant’s belongings aren’t covered.

To ensure that your tenant’s property is covered in such instances, it’s good to require them to purchase renters insurance. This reduces the likelihood of hostility and litigation, it kicks in before your landlord insurance does, and best of all, it’s very affordable. The pros of requiring renters insurance greatly outweigh the cons.