Why Should Landlords Require Tenants to Have Renter's Insurance?

Video Transcript

"This is John Pinelli, financial representative, talking to you today about why landlords should require their tenants to have renter's insurance. Landlords should require their tenants to have renter's insurance for one main reason because it is essentially insuring their stream of income. If renters have renter's insurance and they have items from their property or their place they are renting stolen or damaged those items will be replaced by the renter's insurance policy and the tenants will be able to continue paying rent. Whereas if these items were damaged or stolen the renters might have difficulty the next month paying the rent because they would have to replace some of these items. In addition in a way it helps to pre-screen tenants a bit. If tenants can't afford to pay an extra $20 a month for renter's insurance then you can see how easily certain financial woes could cause them to avoid or miss or skip paying rent. So putting that on them kind of shows that higher level of commitment and shows that they are respectable tenants and as a way to sort of screen your tenants a bit. Also you would want them to have liability coverage which would be covered in a renter's insurance policy. If they have guests over to their house and those guests are injured on your facility they could potentially come after the tenants of the property but they also could potentially come after you as well so it is important to require the tenants to have this type of coverage in case of a major liability which could be quite expensive. Things like a medical expense caused by an injury on your property could be traced back to you and things like legal fees and things like hospital bills can really add up so this is another important reason to have, to require your tenants to have renter's insurance. So this has been John Pinelli, financial representative, talking to you today about why landlords should require their tenants to have renter's insurance."