As a landlord or property manager, your goal is to maximize rents and minimize risk. One of the ways you do that is to purchase landlord insurance to protect your property and limit liability. However, another way to accomplish these goals is to require your tenants to purchase renters insurance as a condition of their lease. Renters insurance protects your tenants and their personal belongings, but it also benefits you. Below are some of the reasons you should have tenants purchase renters insurance coverage.

3 Reasons Landlords Should Require Tenants to Buy Renters Insurance

1. It Gives You Recourse

If your tenants should perform some negligent act—such as leaving the stove on while they pop down to the store—and cause damage to the residence, you would likely have to pay some amount for repairs. Even if your insurance company covers most of these costs, you still must pay a deductible. If your tenants have renters insurance, you can recover some or all of your out-of-pocket losses.

2. It Mitigates Chances of a Lawsuit

If an uninsured tenant should suffer some type of loss while residing on your property—such as an injury or property damage—through no fault of their own, they would likely be displeased at having to shoulder the entire financial burden themselves.

With no insurer to cover their losses, there's a good chance they would turn to you. Many landlords have found themselves party to a lawsuit after their tenants suffered storm or fire losses. Insured tenants are more likely to be made whole, eventually, and are thus less likely to involve their landlord in a court action.

3. It Weeds Out Unreliable Tenants

Renters insurance is normally quite affordable and easy to get. However, if insurers are unwilling to cover a potential tenant, or if the premium they charge is cost prohibitive, it's probably because that person has a history of bad credit, insurance claims, or both. You are likely better off considering other tenant candidates.

If you want to protect an investment property with landlord coverage or wish to recommend a place your tenants can purchase affordable renters insurance, remember Lighthouse Agency in Fairfield, OH. They are a team of dedicated independent insurance agents and brokers who also specialize in home, health, dental, Medigap, and life insurance. Call them at (513) 860-9100 or visit their website to request a quote.