How to require renters insurance

Although renters insurance is primarily designed to protect renters, it also has several important benefits for landlords. That’s why an increasing number of landlords are opting to make it a requirement for all of their residents.

If you don’t yet require renters insurance, it could be time to update your lease terms. It’s not a difficult change to make, but it does require more than simply telling your residents that they need to purchase a policy. Keep reading to learn to make a renters insurance requirement part of your lease, as well as how you can make meeting this requirement as easy as possible for your residents.

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Make renters insurance a requirement in your lease agreements.

To make renters insurance a requirement, you’ll need to add a clause to your standard lease agreement. Then, you can enforce the requirement for all new leases, as well as for month-to-month rentals with legally sufficient notice.

Within this clause, it’s essential to be specific about the amount of coverage you require. As a landlord, the most important part of each resident’s policy is liability coverage, which will protect you if they cause significant damage to the unit or building—the type of damage caused by a kitchen fire, for example. As a general rule of thumb, you’ll want each resident to have a minimum of $100,000 of this type of coverage.

You should also stipulate that the resident must add you to the policy as what’s referred to as an “additional interest”. Additional interest is a designation that requires the insurance company to notify you of any changes to your tenant’s policy. This way, you’ll know if the policy is canceled, altered, or not renewed, and can take appropriate action.

Consult your lawyer.

The clause you add to your lease about your renters insurance requirement should be clear but comprehensive. As an example, I’ve included a sample lease clause here.

As a caveat, I am not a lawyer, and the following is not legal advice.

Required renters insurance. Landlord does not maintain insurance coverage for the personal property of Tenant(s) or personal injury to Tenant(s) or their guests. Tenant(s) is required to maintain a renters insurance policy with a minimum of $100,000 in liability coverage. Tenant(s) is responsible for obtaining insurance within seven (7) days of residing on the Premises. Tenant(s) must also list Landlord as Additional Interest.

Once you’ve added a renters insurance requirement clause to your lease, be sure to have your lawyer review it. You need to make sure that it’s legally sound, otherwise it won’t be enforceable.

Make it easy for your residents to purchase a policy.

Once you’ve added a renters insurance requirement clause to your lease, any residents that sign that lease are legally responsible for obtaining a policy on their own. Still, you can simplify the process by directing them to provider that offers the coverage you require.

While your residents can purchase renters insurance from any provider that meets your requirements, making a recommendation eliminates the need for them to spend time researching their options. This makes it all the more likely that they’ll purchase the coverage they need before move-in day.

If you choose to send your residents to Jetty for renters insurance, they’ll be able to purchase a policy in less than two minutes—right from their smartphone—and policies cost as little as $5/month. Our customizable plans will not only meet your requirements, but also protect them from a wide range of costly scenarios.

The easier you make it for your residents to get covered, the easier it will be to make sure that your new renters insurance requirement is met—maximizing protection for your building, and reducing your overall risk.