When you open your rental property to tenants, you want to make sure that you’re bringing in a crowd that’s good for your bottom line. Renters insurance serves several purposes. Not only does it protect your tenants from harm, but it also stands between you and any unexpected legal fees that a negligence suit may level against you. When you require your tenants to have renters insurance and to provide proof of renters insurance, you’re encouraging them not only to protect themselves but you, as well.
What is Renters Insurance?
Only parties currently renting or looking to rent a landlord’s property have the right to apply for renters insurance. This coverage, in turn, serves to protect interested parties from the losses they might face while occupying the property in question.
Renters Insurance Coverage
A tenant’s renters insurance coverage will vary based on the provider that they choose to work with. However, renters insurance most often covers losses include:
- Theft from your home or car
- Environmental damage
- Loss on a rental property
- False liability claims or claims related to guests
The damages that tenants receive from their renters insurance policy help them replace any of the belongings they may have lost while under the care of a landlord. Tenants can work with one of their provider’s adjusters to learn more about what their potential compensation may look like.
The Benefits of Renters Insurance
The benefits of renters insurance for tenants include compensation and the protection of an individual’s property. That said, landlords require renters insurance and proof of renters insurance from their tenants for special reasons. A landlord’s benefits from renters insurance include defenses against natural disasters, theft, and injury to guests or pets.
In short, a tenant’s renters insurance relieves landlords of the financial responsibilities they might otherwise bear an injured party. While landlords can still be brought up on charges of negligence or personal injury, depending on the circumstances surrounding a tenant’s losses, renters insurance is the first line of defense between them and any related expenses.
Why Should You Require Proof of Renters Insurance?
As mentioned, renters insurance protects landlords from having to cover their tenants’ financial losses in the face of unexpected disasters, property damage, and other circumstances involving harm to or loss of a tenant’s belongings. While landlords may still be vulnerable to civil suits, insurance (as mentioned earlier) is their budget’s primary defense.
Renters insurance also helps landlords get a better idea of what tenants are interested in their units. When tenants provide a landlord with proof of renters insurance, they indicate that they have taken a distinct responsibility for their personal belongings. In turn, a landlord may feel more comfortable knowing that the applicable tenant can take care of their financial needs, meaning they’re likely to pay their rent consistently.
Documentation of Renters Insurance Policy
There are a few different documents that a landlord can request as proof of renters insurance. Landlords can ask tenants to submit a copy of their policy’s declaration page detailing their coverage and regular expenses. Landlords can alternatively request that tenants provide their policy number on their rental application as a means to verify their renters insurance policy. Some parties may even accept a digital copy of a tenant’s renter’s policy.
If you are not sure what kind of proof you’re most interested in, consider the rental system you currently have in place. For example, certain online rent payment platforms let you collect a tenant’s paperwork in one easy-to-access location. You can request that tenants upload their proof of insurance there or otherwise store your policy information with a digital copy of their lease.
Renters Insurance and You
Whether you’re a tenant or a landlord, proof of renters insurance comes with inherent benefits. Tenants have the opportunity to regain any property they might lose while on a landlord’s property. Landlords can also rely on an insurance provider to cover their tenants’ losses instead of providing for those losses themselves.
With that in mind, consider requiring proof of renters insurance with every new renter’s application you accept. This coverage tends to be to everyone’s benefit.