There are lots of misconceptions when it comes to renter’s insurance. Many renters, for instance, believe there’s no need to purchase renter’s insurance because their landlord is responsible for the property. This, of course, is not the case. Most landlords don’t have insurance policies that protect tenants against personal liability.

What’s more, many landlords think they can’t legally require renter’s insurance. Again, this is false. Typically, landlords can implement a renter’s insurance requirement at the start of a new lease or when a tenant renews their lease. As always, be sure to check your local and state laws to know if and how you can require renter’s insurance.

Additionally, many tenants and landlords aren’t even sure what renter’s insurance actually covers. To clear things up, renter’s insurance protects against the following:

  • Losses due to theft
  • Damages to the tenant or landlord’s property
  • Personal liability for injuries
  • Natural disasters or fires

By not requiring renter’s insurance, you’re taking a big risk for yourself, your business, and your tenants. Still not convinced? Below, we go over 5 ways that not requiring renter’s insurance puts you at risk. By the end, you’ll agree that it’s time to start requiring renter’s insurance in your leases.

#1 Risk of Lawsuits

Even with a landlord’s liability policy, tenants are not typically covered for property damage or personal liability for injuries on the property. With renter’s insurance, however, tenants are protected in the case of damages to their personal property and to your property. It also protects tenants’ personal liability if someone is injured on the property and they are in some way responsible. By requiring renter’s insurance, landlords reduce the risk of lawsuits because they and their tenants are both protected.

#2 Risk of Relocation Expenses

Many states require that landlords pay for relocation expenses if the tenant must move temporarily due to a fire or natural disaster. And even if you have no legal obligations, you may still feel responsible to assist them.

Relocation expenses can be costly, and that’s on top of the damages to your property. Fortunately, many renter’s insurance policies assist with temporary living costs in the case of damages. By not requiring renter’s insurance, you place your tenants and yourself at risk of costly expenses.

#3 Risk of Property Damage Claims

If there is a fire, water damage, or some other form of property damage that affects your tenant’s belongings, they may come to you seeking compensation. It’s unlikely that your insurance will cover these costs, but this is exactly what renter’s insurance is designed for. With renter’s insurance you will have peace of mind that you won’t be held responsible for damages that are out of your control. Without it, you put yourself at risk for claims.

#4 Risk of Increased Premiums

Each time a tenant files a claim against you, you run the risk of increased premiums. Or worse still, your insurance company may drop you entirely. By requiring renter’s insurance, you mitigate the expenses your own insurance policy will be responsible for, which lowers the chances of increased premiums and expensive policies.

#5 Risk of Missing out on Renters

Without protection from property damage, many landlords feel that they can’t allow pets without charging significantly higher security deposits or expensive pet fees. With renter’s insurance, though, landlords can adopt a pet-friendly policy because they are insured against potential damages to their property.

This is extremely beneficial, seeing as how 68% of American households own pets. With renter’s insurance, your pool of potential tenants increases dramatically. When you don’t require renter’s insurance, you risk long periods of vacancy and might miss out on quality tenants.


Running a rental business comes with unavoidable expenses — it’s a given. So when you encounter expenses that can be avoided, you must take the necessary steps to protect your business. By requiring renter’s insurance, you mitigate risks and avoid unnecessary expenses. It’s a no-brainer.Ren