Why you should suggest your tenants have renter’s insurance

There are ways insurance policies designed primarily to protect the interests and possessions of tenants that are living in a home but don’t own it. This insurance, known as renter’s insurance, does overlap in some regards with regular home insurance and landlord insurance too. The difference is that it is primarily based around protecting the contents within the house that belong to the tenant, and covering tenants’ legal obligations should they be liable for damages or other.

Renter’s insurance doesn’t just provide a benefit to the tenant, but also to the landlord. It offers another level of protection to your home and its content and reduces the chance of there being a serious dispute down the track. Further, it’s really the only way for a tenant to protect their contents.

Let’s take a look at the main reasons it’s a good idea to encourage or even require that your tenants have their own insurance policy.

Doing so can act as a screening method

One of the trickiest parts of a landlord’s job is finding an appropriate tenant that is going to be reliable and trustworthy. Interestingly, insisting that a tenant has renter’s insurance can ensure that you’re getting involved with someone you know you can trust. Of course, in some situations this may be unreasonable, depending on where your rental property is located and the cost of rent, etc. If you are renting out a small apartment for a low cost, it might be asking a bit much to require that they have this kind of insurance. On the other hand, renter’s insurance can be quite inexpensive and you’ll ideally find a tenant that can afford this extra cost.

Reduces the chance of legal action

As mentioned, when both parties have insurance, the risk of a lawsuit is mitigated. People become desperate when they don’t have insurance and they feel like they’ve lost something, so they are more likely to put the blame on you. If a landlord’s expensive belongings are destroyed while in your home and the tenant has no renter’s insurance, there’s a good chance they come after you. Even if you win the case and you’re cover by insurance, chances are you’ll be paying higher premiums the next year not to mention the time you’ve spent dealing with the issue.

It looks after the tenant so you don’t have to

If things go bad and your home is unlivable due to an accident, fire, flooding, etc. it can be your responsibility to find the tenant other housing in certain circumstances. While this isn’t necessarily the norm (a good landlord insurance policy can cover you here), your tenant having renter’s insurance is just an extra layer of protection that can help you avoid responsibility.

It looks after the interests of your tenant

A happy tenant is a good tenant. The less drama they find themselves in, the better off they are and the more likely they are to remain in a stable situation. As a landlord, this is really what you want in a tenant. In the same way, you would hope your tenant have health insurance, they are going to be best looked after if they have renter’s insurance as well. It means that if something does go wrong, they are better equipped to overcome it.

Some tenants may not be aware that their belongings and interests are not always covered by your landlord or home insurance. Visit to see more information about landlord insurance. So it can be a good idea to at least suggest that they have renter’s insurance in place, especially considering the fact that it is quite affordable.