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Why You Should Require Renter’s Insurance


Part of being a successful landlord in Howard County is ensuring that your rental property is safeguarded in the case of an emergency.  And oftentimes this is accomplished by requiring your tenants to have renter’s insurance.

Yet, according to the Insurance Information Institute, as of 2016, only 41% of renters reported to have renter’s insurance.

Renter’s insurance is greatly beneficial to both property owners and tenants.  Thus, you should not overlook the compelling reasons to require your Howard County tenants to have a renter’s insurance policy in place upon move-in.

Not sure what those compelling reasons are?

Read on to find out.


Reasons Why Renter’s Insurance is a Must

1. Lessen the Threat of a Lawsuit

Landlord-tenant disputes are nothing new to the rental property business.  And, while sometimes there is good cause for a tenant to take you to court, the truth is, property owners should try to avoid a court dispute at all costs.

If your tenant’s personal belongings are damaged, depending on the reason for the damage, there is a chance they may try to take you to court and make you responsible for covering their losses.  This is especially true if they do not have renter’s insurance.  And though it is unlikely your homeowner’s insurance covers your tenant’s personal belongings in the case of an emergency, that is not to say your tenant will not attempt to collect anyway.

In the end, requiring your tenants to have renter’s insurance voids the possibility of a lawsuit since renter’s insurance covers not only damage to your property, but also the personal belongings of your tenant.


2. Reduce Your Responsibility


In addition to lessening the chances of a lawsuit, requiring renter’s insurance eliminates some of your responsibility in case an emergency occurs at your rental property.  Take a look at two examples:

  • Structural Damage. Should your rental property suffer from any type of damage that renders it uninhabitable, you will be responsible for providing your tenant temporary housing in the absence of a renter’s insurance policy for the entire duration of damage repairs. This also includes providing necessities such as food and clothing.
  • Personal Injury. If someone in your rental property, whether that be your tenant or a guest, is injured, and there is no renter’s insurance policy in place, you may be responsible for damages.  This is likely to include medical bills and any other damages the courts feel are owed to the injured party.  Plus, you can be sure to have higher premiums the next time you renew your landlord’s insurance, which ultimately cuts into your annual profits.

If your tenant has renter’s insurance, temporary living accommodations are covered and personal injury liability falls upon the tenant, not you.  This added layer of protection with renter’s insurance not only protects your tenants during an emergency, but prevents you from having to foot the bills as well.


3. Ensure Cleanup and Avoid a Disappearing Tenant

If your tenant does not have renter’s insurance and something terrible happens to your property, such as a flood or small house fire, there is a scary chance they may just move out unannounced, leaving you to clean up the remnants and reap the costs of fixing the property as well as the costs of having a vacant property.

That said, with a good renter’s insurance policy in place, your tenant is more likely to deal with the problem appropriately and remedy the situation.  This is because most, if not all, of the incurred damage is covered under the renter’s insurance policy; and your tenant knows this.  In fact, some renter’s insurance policies will even cover the removal and disposal of damaged property.


4. Place Higher Quality Tenants


For those that are unfamiliar with renter’s insurance policies, it is good to know that they are relatively cheap.  For example, the Independent Insurance Agents and Brokers of America estimate a decent renter’s insurance policy can go for as low as $12/month.

If you inform your tenants that they will need to have renter’s insurance in order to live in your Howard County rental property, and they balk at that, you have to ask yourself why.

If your potential tenant claims they cannot afford the monthly expense of renter’s insurance, then you might reconsider their application and your intentions of placing them in your property.  After all, making the monthly rent payment is important and if they cannot afford $12/month, what are the chances they will not be able to make the rent each month?

Additionally, if cost is not the factor for refusing to get renter’s insurance, you may want to ask yourself why your potential tenant is not willing to agree to take responsibility for possible damage they inflict on your investment property.

In the end, it is your responsibility as a property owner to require your tenants to have renter’s insurance before moving in if you want to add that extra layer of protection to both your tenant and yourself.  Doing so will ensure you a more successful experience as a landlord and will save you money, time, and stress.


The importance of renter’s insurance should never be underestimated.  If you own rental property in the Howard County area and are looking to add a required renter’s insurance provision to your lease agreement, contact Bay Management Group today.  As the most experienced and knowledgeable property management company in Howard County, MD, Bay Management Group can help you draft an airtight lease agreement complete with renter’s insurance requirements.

Further, we can help you manage all other things property related including, but not limited to:

  • Tenant screening and placement
  • Rent collection
  • Eviction procedures
  • Regular property inspections
  • 24/7 on-call maintenance requests

Avoiding disasters such as fires, floods, theft, or personal injuries is nearly impossible.  However, with the help of Bay Management Group, you can rest assured you and your tenant are as protected as possible so that should the unthinkable occur, you are well prepared.