How good landlords use renters insurance to protect themselves

There are plenty of benefits for a renter to carry renters insurance, but did you know how it can protect you as the landlord?

The most important part of this policy for you the landlord, is the line of liability that is included. Most renters policies include liability that protects you against fire, smoke and explosion. If there is any of this type of damage to the rental unit it can be run through their renters policy and not your policy.

Also, if this type of damage occurs, they will need to live somewhere else for awhile while it’s being fixed. A renters policy will pay for those additional living expenses for the tenants.

This policy can really protect you against a tenant filing a lawsuit against you. Let’s say they don’t have a renters policy and a fire starts and it’s deemed to be due to faulty or old wiring. Your policy will have to be used to repair the damages, and they may sue you for the loss of their personal property and for not having a place to live. A renters policy covers ALL of that.

There is also a clause in many renters policies called the “good neighbor clause”. This would protect you again, if a tenant causes damage to another tenants property.

If you are going to have your tenants carry renters insurance, it’s a good idea to put it directly in their lease and should be added as an “Additional Interest”. This just means if the policy goes out of force, you will be notified. Check out the podcast below- It is all of 6 minutes long and will help you understand all of the benefits of having your tenants carry this coverage.