As a Florida landlord, to protect your financial investment, you most likely carry insurance that protects your rental property structures, as well as certain types of liability through Florida rental property insurance, also known as Florida landlord insurance. There’s one more thing you can do to strengthen your protection and it won’t cost you a dime: Require your tenants to carry renters insurance.
Why Landlords should require Tenants Carry Renters Insurance
While renters insurance primarily benefits your tenants, it also carries significant benefits for you as a landlord. Encouraging or requiring tenants to carry renters insurance can prevent a lot of headaches and misunderstandings, provide you with financial and legal protection, and make the claims process faster in the event of a loss.
While renters aren’t required by law to carry renters insurance, you as a landlord can make it a requirement of the lease. You may also want to require proof of renters insurance as a condition for renewal each year. To do this, ask your tenant to list you (or your LLC) as an additional interest on their renters insurance along with your address. Doing this will ensure that you get a copy of any notices of cancellation for non-payment of premium, or nonrenewal notices.
How renters insurance benefits landlords
- When your tenants have renters insurance, it provides an extra layer of financial protection for you as landlord if a guest of the tenant is hurt at the property. Renters insurance typically covers medical payments, so there is less likelihood of a lawsuit against you and your tenant. And if the injured party does decide to sue, renters insurance provides liability coverage. Your tenant’s renters insurance may handle the entire situation without you needing to make a claim on your landlord policy.
- Renters insurance covers the renter’s personal belongings, including furniture, TVs, computers, bicycles, and so on. Renters often don’t realize their personal belongings aren’t covered under your landlord policy, and they could try to make you responsible if their property is damaged or destroyed by a covered peril. If renters know their property is covered, they will be less likely to sue you for damages in the event of a loss. An example of this would be if a pipe bursts and damages your tenant’s belongings. You as landlord would be responsible for repairing the pipe, but your tenant’s belongings would be covered by renters insurance.
- Since most renters insurance pays loss of use or relocation expenses, your tenants will have some financial help if their unit was so damaged in a covered peril that they can’t live there during repairs. Again, if they have this financial help, they are less likely to try to get you to pay for their expenses.
- Renters insurance may mitigate risks of pet property damage or injuries to others (though it probably doesn’t cover damage to the rental itself). If your tenants have this coverage, you may be more likely to allow pets, which many prospective tenants look for. Note that nearly all policies in Florida exclude dog bites—if your tenant has a dog, they will need a specific endorsement for dog bite liability coverage.
- Requiring renters insurance is a way to help you find the best renters from your pool of applicants. Those willing and able to carry renters insurance are more likely to be responsible tenants and to pay their rent on time. They may even be more likely to take care of your property and to report small problems before they become big ones.
Renters insurance is affordable and can help keep rents from rising
Renters insurance remains relatively affordable. Depending on coverage limits, for less than $200 a year, your renters—and you—can have peace of mind.
Help your tenants understand the benefits of renters insurance—that it not only provides protection for their belongings and their liability, it also can help you keep from raising rents because you’re not having to make repairs, file claims (which may result in higher premiums for your insurance), or pay deductibles for situations covered by your tenants’ renters insurance.
For more information, call L & M Insurance Group
Need more information about renters insurance, or landlord insurance? Call one of L & M Insurance Group’s agents at 813-672-4100. We can help your tenants find a policy right for their needs. We also specialize in insurance for property investors—so if you have insurance needs of your own, please give us a call!
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