Asked by Joseph  |  Submitted January 14, 2014

Does renters insurance cover me and my tenants?

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  Answers  |  1

July 08, 2014

Renters insurance covers your tenants, Joseph. As a landlord, it's very important for your tenants to carry this coverage for two primary reasons: 1) their personal property will be covered should something happen (pipe burst, fire, etc); and 2) they'll have liability coverage should they get sued for something that happens in their home. The first is important to you because too many tenants think their landlord is responsible for damage to their possessions when something happens to the rental unit, and the second is important because if your tenant is getting sued, it's highly likely you'll be sued too. Best to use their liability coverage when you can & keep those claims off your policy if at all possible.

If allowed by your state, it's a good idea to require that your tenants maintain renters insurance and list you as an interested party. That way you'll be notified if they let the policy lapse. The cost of renters insurance shouldn't be significant, especially if bundled with their auto insurance. Some of our landlords have made this requirement part of their lease renewals and "offset" a portion of the rent increase to help defray the cost.

Since renters insurance only covers the tenant, you'll need landlord insurance, also known as dwelling/fire insurance to cover your exposures. With so many new landlords out their renting property for the first time, it's also important to note that homeowner insurance typically does not cover rental activity. If you've decided to rent a home that you or someone else used to live in, be sure that you have landlord insurance on that property and not homeowners insurance.

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