It is estimated that fewer than one third of all renters carry any kind of insurance. That begs the question: should you require your tenants to hold renters insurance while living on your property?
As a landlord, your insurance policy covers the building structure only – not any of the personal belongings inside the unit. Should a pipe burst or a burglary occur, any items damaged or stolen won’t be covered by your insurance policy. That’s why it’s so important for tenants to protect themselves with renters insurance.
It’s a good idea to require renters to show proof that they hold such insurance. Include the requirement in the lease and ask for it before turning over the keys to the apartment. For tenants who refuse, consider adopting a Tenant Liability Insurance Program. The program protects landlords should a resident be liable for damage to a unit in the event of a fire, sewer overflow or water damage.
– Scott Safadi, Cal Bay Property Management