Property Management

What Renters Insurance Should You Require Your Tenants To Have?

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Belong on Jan 25, 2023

An image of a hand over a home insurance policy. Learn more about renters insurance and if you should require tenants to have a policy.

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Renters insurance is a type of insurance policy that provides financial protection for individuals who are renting a home. It covers personal belongings and provides liability coverage for residents. Renters' insurance is usually relatively inexpensive and can provide peace of mind for tenants by protecting their personal belongings and financial interests.


Renters insurance also provides protection for homeowners by reducing the risk of legal action taken against them if their residents are held liable for damage that occurs on the property. This is why many homeowners choose to require tenants to obtain and hold renters insurance for the duration of their lease term.


It is important to note that renters insurance does not cover damage to the rental property itself. Landlords will typically need to have their own insurance policy to protect against damage to the rental property and other risks associated with being a landlord.




Should you require your residents to obtain renters’ insurance?


Most apartment owners and landlords do require their tenants to have renters’ insurance. As a homeowner of a single or small number of rental homes, should you? There are two reasons to consider requiring your residents to obtain renters insurance:



  • Protection for you: If your tenant is held liable for an injury or damage that occurs on the rental property, their renters insurance may cover their liability, protecting you from financial responsibility.


  • Protection for your residents: Renters insurance can provide financial protection for your tenants in case of damage to their personal belongings or liability for injuries sustained on the rental property. Renters insurance can also provide your tenants with temporary housing if their rental unit becomes uninhabitable due to a covered loss.



What kinds of renters insurance products are there?


There are generally two types of renters insurance. Actual cash value coverage covers the cost to replace your personal belongings, minus depreciation. Replacement cost coverage covers the cost to replace your personal belongings without taking depreciation into account. This means that you would be reimbursed for the full cost to replace your personal belongings with new items of similar quality.


Some policies may offer a combination of actual cash value and replacement cost coverage, with different limits and deductibles applying to different types of losses.




What type of renters insurance should you require your residents to have?


Most landlords, especially corporate landlords operating apartment buildings or multi-family units, require tenants to obtain renters insurance with at least $100,000 in liability coverage.  


You should require your tenants to have coverage that is sufficient to protect their personal belongings and cover any potential liabilities. This may include coverage for personal property, loss of use, and personal liability.


Depending on where your home is located, you should be aware of any exclusions in the policy, such as coverage for flood damage or earthquakes, as these types of events may not be covered under a standard renters insurance policy. If you are in a flood risk area, for example, you may want to require policies that cover flood damage. 




Does Belong require residents to obtain renters’ insurance?


Belong requires all residents to obtain renters insurance with $100,000 in liability coverage in order to rent a property cared for by Belong. Residents have the option to opt-in to renters insurance set up by a Belong partner so they can roll the cost of the insurance right into their rental payment, saving them time and headache on choosing a provider. For more information, please contact your local Belong team.