TL;DR
- Renters insurance isn’t mandatory under any federal or state laws, but landlords may require proof of insurance under the terms of your lease.
- Requiring tenants to get insured helps lower a landlord’s exposure to unexpected costs, and arguably makes it easier to screen for responsible renters.
- For a low monthly price, renters enjoy the peace of mind that comes with knowing their personal property, liability, and loss of use are covered across a range of bad scenarios.
- Even if your landlord doesn’t require renters insurance, it’s an affordable option you likely want to consider.
You’ve asked all the right questions during your apartment hunt, found the perfect pad, and are now ready to sign that lease. There’s just one small surprise: You discover that your landlord requires proof of renters insurance.
What gives? Doesn’t your landlord have to carry their own insurance—and if so, why do you need renters insurance?
Yes, your landlord is required to hold insurance, and you can even ask to see their insurance certificate. But your landlord’s insurance is designed to protect, well, your landlord, not you, the tenant. That means their insurance covers the physical building—a ceiling that might leak, walls that might get damaged—and all the stuff that they own and you don’t (which might include stuff like the fridge, oven, and other appliances).
So how, exactly, does renters insurance protect you, and why might your landlord require it under the terms of your lease? Here’s the lowdown on why your landlord might be insisting on renters insurance—and why you should consider getting a policy, even if your new place doesn’t require it.
- When is renters insurance mandatory?
- 6 reasons why landlords require renters insurance
- The benefits of renters insurance for tenants
- How to find the best renters insurance
When is renters insurance mandatory?
Ultimately, there’s no state or federal law that obligates you to get renters insurance. That said, it’s legal for landlords to require their tenants carry it, and many landlords and property management companies include mandatory insurance coverage as a clause in lease agreements.
6 reasons why landlords require renters insurance
Why do 81% of landlords say that a tenant’s willingness to get renters insurance can make or break a deal? Here are 6 good reasons why smart landlords make sure their renters are insured.
1. Renters insurance protects the tenants’ personal property
Among the biggest differences between landlord insurance and renters insurance: While landlord insurance covers the structure of your apartment building and any landlord-owned property on the premises, it generally won’t cover tenant-owned property.
That’s why landlords who want to make sure that their tenants’ furniture, clothes, art, electronics, and keepsakes are covered will often require their renters to buy insurance coverage.
2. It helps lower the risk of lawsuits a landlord might face
While landlord insurance typically won’t cover tenants’ belongings if they’re stolen, damaged, or destroyed, requiring each tenant to purchase renters insurance can reduce a landlord’s legal liability.
For instance, say a fire ignites and spreads to multiple units within a building. In some cases, tenants might sue to demand that their landlord pay for damages to their personal property. But because renters insurance covers tenants’ personal property, that’s much less likely when everyone living in the building is insured.
3. It protects the landlord against personal liability
Having a renters insurance requirement also comes in handy if a guest is injured on the premises of an apartment building or residential complex. Without renters insurance, the injured party might blame the landlord and sue them for damages.
It’s worth noting that landlords are generally only liable for injuries if their property is considered structurally unsound. Consider, for example, a scenario in which a landlord puts off repairing broken railings on a stairwell and someone later takes a spill. In that case, the landlord is in serious legal jeopardy.
With a renters insurance requirement, landlords and tenants alike can rest easy knowing that renters policies include personal liability coverage to help cover medical and legal costs if a guest gets injured within your unit. That minimizes or even eliminates any expenses the landlord might otherwise incur.
4. It helps cover relocation costs (so the landlord might not have to)
In some states, landlords have to cover the cost of relocation for their tenants if the property becomes unlivable for certain reasons. That’s another worry that’s lifted by renters insurance, since renters’ loss of use coverage can help foot the bill for some extra living expenses that tenants might incur while they’re away from home (like food, lodging, and laundry).
5. It makes it easier to open the door to pets
Some renters insurance policies include pet liability coverage. Requiring renters insurance, then, makes it easier for landlords to adopt a pet-friendly policy.
A reminder for pet parents: While your renters insurance policy can help cover pet-related liability—like if your dog nips a guest and you need to pay their medical bills—you’ll want to buy pet insurance to cover your pet’s own veterinary bills. Your renters insurance may not cover pet liability, though, if your dog has a history of biting or is considered a high-risk breed, and it’s also important to remember that renters insurance usually won’t cover any damage your pet might cause to your unit or personal property.
6. Renters insurance could help identify reliable tenants
Like it or not, a major part of securing an apartment is impressing your potential landlord.
And many landlords require renters insurance as an indirect way of screening potential tenants. The thinking goes that tenants who carry renters insurance are more likely to be responsible and to care about their surroundings—so mandating renters insurance can be an effective way to find trustworthy, considerate, cautious tenants.
The benefits of renters insurance for tenants
If you’re renting a property, there are good reasons why you should want to get renters insurance for yourself. Let’s take a quick spin through them.
Renters insurance covers your personal property
High on the list is making sure that your personal belongings are covered, from your laptop to your bike or engagement ring. If your things get stolen, damaged, or destroyed, your landlord’s insurance won’t help, but a renter’s policy will.
Here’s one big thing that a lot of people don’t realize: Typically, renters insurance covers your possessions even if they get stolen or damaged by a covered peril away from home, like if a thief makes off with your bike while it’s parked outside a cafe, or a pickpocket swipes your iPhone while you’re on the subway.
It protects you from personal liability
Renters insurance can also help protect you from liability claims if you cause damage to your landlord’s property (i.e., your unit, surrounding units, or any landlord-owned furniture or appliances) after a deep fryer fire. It can also save the day if your bathtub overflows and causes damage to your downstairs neighbor’s apartment, or a guest is hurt while they’re in or near your home.
Your liability coverage can help pay for injured guests’ medical bills and any legal issues arising from their injury. When you have renters insurance, you’ll enjoy peace of mind, without worrying about the costs you’d have to bear if an accident happens.
It offers support for temporary housing costs
If your rental home becomes unlivable due to a covered loss, and you have to move out in a hurry, you could end up with huge hotel bills or short-term rental charges. Renters insurance that has loss of use coverage can help pay for these costs.
Renters insurance offers a lot of security for not a lot of $
Finally, we’d argue that the benefits simply outweigh the costs. Renters insurance is relatively low-cost, and Lemonade offers the nation’s top-ranked renters coverage at an incredibly competitive price. In exchange, you’ll rest easier knowing that your policy has you covered against some of the curveballs life can throw.
How to find the best renters insurance
From both a landlord and a tenant’s perspective, renters insurance is a pretty sweet deal. But how do you choose the best policy, and how much coverage do you actually need?
To make sure you’re adequately covered, think about the value of your belongings, including your bike, laptop, and even your clothing. Once you’ve added up the cost of replacing them all, you’ll have a better idea of the amount of personal property coverage you need.
When selecting your loss of use coverage amounts, keep in mind that repairs to catastrophic damage can take three months to half a year, so keep in mind both the potential length of time you may be away from home, as well as the cost of living in the market where you live.
And if you’ve got a pup you’re worried might bite others, you might want to consider increasing your liability coverage.
TL;DR: Consider your individual circumstances and lifestyle, and look for insurance coverage that’s easy to customize accordingly. Lemonade allows you to easily choose and customize coverage limits according to your own specific needs.
We’re confident enough in our own product to say: Do your research, and shop around!
There are plenty of insurance companies who offer renters insurance online, so you can compare their terms and the cost of premiums. Check the policy carefully for coverage limits and deductibles, but bear in mind that they’ll affect how much you have to pay in premiums. Higher deductibles mean lower premiums, while higher premiums mean more protection. It’s your call.
If you have particularly valuable possessions, like high-end art, precious jewelry, or certain types of e-bikes, you might need to purchase a little extra coverage for those items.
Ready to get your renters insurance? You can do it all online with Lemonade. Click below and we’ll get you a quote for an easily customizable policy in just a few minutes.
A few quick words, because we <3 our lawyers: This post is general in nature, and any statement in it doesn’t alter the terms, conditions, exclusions, or limitations of policies issued by Lemonade, which differ according to your state of residence. You’re encouraged to discuss your specific circumstances with your own professional advisors. The purpose of this post is merely to provide you with info and insights you can use to make such discussions more productive! Naturally, all comments by, or references to, third parties represent their own views, and Lemonade assumes no responsibility for them.represent their own views, and Lemonade assumes no responsibility for them. Coverage may not be available in all states.
