As a real estate investor, you need to have insurance coverage in order to protect yourself (as well as your mortgage lender, if applicable) from any number of perils that may occur. These can include damage or destruction of your property due to fire, vandalism, and / or certain types of natural disasters. But, while you may have the property well covered, can you require your tenants to obtain renters insurance? In a word, yes.
Landlords can in fact require that tenants purchase a renters insurance policy as a part of the overall lease. With this type of coverage, your tenants’ belongings will be covered – and policies can also provide coverage for liability in certain situations that may occur.
While renters insurance can provide a benefit to your tenants, there are also several ways that this type of coverage can protect you, too. For instance, one advantage is that it could mitigate the threat of a lawsuit.
In this case, if damage were to occur to a tenant’s belongings – and if he or she did not have renters insurance – it may be that they would attempt to claim some type of landlord responsibility. So, knowing that you are less likely to face a possible lawsuit can offer you some peace of mind.
Requiring the purchase of renters insurance may also have other benefits for landlords, too, such as “weeding out” potentially bad tenants. Here, if a potential tenant claims that they cannot afford a policy, it may be a red flag that they won’t be able to pay their monthly rent, either.
Renting and managing investment property can be time-consuming, as well as fraught with all sorts of situations. Having a property manager to take care of all of these in’s and out’s, though, can free up your time to focus on other things. For more information on all of the services that a professional property manager can offer, give us a call today.