Most landlords allow their tenants to decide whether or not they want to purchase renter's insurance. Most of these policies only cover the tenant’s belongings, so property managers feel that it doesn’t affect them since the coverage doesn’t extend to the building itself. However, it can have a significant impact on how any incidents of damage or destruction would be handled. Below are some of the crucial reasons you should require your tenants to buy renters insurance as part of their lease agreement.

3 Reasons You Should Require Your Tenants to Buy Renters Insurance

1. It Covers Your Deductible

If your tenants somehow damage the property—whether by negligently starting a fire, letting the bathtub overflow, or through some other means—your rental property insurance company will pick up most of the tab. However, you will still have to pay the deductible, which could total hundreds or thousands of dollars. If you insist that your tenants buy renter's insurance, you'll have a clear way to get that amount back.

2. It Lessens the Chance of a Lawsuit

If a fire or other event occurs that destroys your tenants' belongings, they are less likely to sue you for negligence if their own policy covers their losses. Tenants who have no coverage may try to get you to reimburse them for their loss, even if you were at no fault for the accident. Such a situation would prove time-consuming and bothersome, and this could result in you having to pay hefty legal fees.

3. It Weeds Out Risky Tenants

A renters insurance requirement acts as a pre-screening of prospective tenants. It keeps those from applying who either cannot afford the coverage or who are refused coverage by insurers. This likely means they have been involved in costly claims in the past. Those who decline insurance or cannot obtain a policy are a significant liability, both financially and in terms of taking care of your property. 

To purchase rental property insurance on your residential house or apartment building, contact Barron Mutual Insurance Company in Barron, WI. They have served clients throughout Northwestern Minnesota since their founding in 1891. They can also provide your tenants with affordable renter’s insurance and ensure that everyone is given peace of mind in the event of an accident. They also specialize in light commercial, seasonal property, mobile home, and farm insurance. Call (715) 537-5141 to work with a seasoned agent to design a policy or visit their website to request a quote.