Are You Requiring Renters Insurance?

At Anderson Insurance Group we have been through many scenarios where landlords call, their rental property has been involved in a fire and their tenant has nowhere to go, no coverage for their “stuff” and the landlord is left with the hassle of rebuilding their property and big claim on their insurance policy. A $15.00 per month renters insurance policy can solve a lot of problems when there has been a fire or when someone has been hurt on your property. We see this 1-2 times a year and the claims are normally around $250,000 which is too often and too much. Landlords need to better protect themselves by requiring their tenants to carry renters insurance.

Large apartment complexes require renters insurance and while it may require a little more work its something that every Utah landlord large or small should require. There are a few benefits for a landlord when you require renters insurance, here are just a few:

  1. A renters insurance policy provides a layer of liability insurance between you, the tenants and their visitors. If the tenant’s mother-in-law drops by to visit, trips and falls the renters insurance may respond before your landlords insurance providing an additional layer of liability coverage. This is especially important if your tenant has a dog. The average dog bite claim across the nation is $50,000, make sure your tenants policy does not limit dog bite claims or exclude certain breeds. We recommend you require your tenants to carry at least a $300,000 limit of liability coverage.
  2. Fire Legal Liability is part of every renters insurance policy and will pay for damage to your property if the tenant is negligent or responsible for starting a fire. Accidents happen – if your tenant leaves something cooking on the stove or their grill causes a fire, their renters insurance will pay for the damage. It will also pay for the damage to other structures so if your rental is a condo or townhome this coverage becomes even more important.
  3. Renters Insurance will help pay for your renter to relocate if the dwelling is damaged from a covered loss. As landlords sometimes we develop relationships with our renters and feel a need to help them and a renters insurance policy will pay for them to find a new home.
  4. Tenants with renters insurance are more responsible. Some tenants don’t care about renters insurance which means they probably also don’t care about their things or your property. Mention your requirement during the interview process to help find better renters.

The cost of renters insurance can be as low as $10.00 per month and if your tenant combines renters insurance with their auto insurance it normally discounts the cost of their auto insurance so the net cost of the renters insurance is zero.

Make sure you are listed as Certificate Holder on your tenant’s renters insurance policy. A certificate holder will receive notice of the coverage limits, renewal notices and most importantly a notice if the renters insurance cancels. If your tenant cancels their renters insurance and you receive notice you should issue a three notice to comply or vacate.

Call us for more information on renters insurance and any questions you have about land lording, we love helping our customers be successful Utah landlords.

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