Renters are sometimes surprised when faced with a requirement from their potential landlord that prior to signing a lease, they must show evidence that they have an active renters insurance policy.

Can a landlord require a renter to have renter insurance? Why would a landlord require proof of renters insurance from a prospective tenant?

The short answer to the first question is yes, landlords are fully within their rights to require their tenants purchase renters insurance.

Let’s look into the “why” question — why would a landlord require a tenant to have renters insurance as part of the lease agreement?

Why do I need renters insurance? Doesn’t my landlord have insurance?

There are a lot of misconceptions about what a landlord’s insurance covers. Yes, the landlord does have insurance on the building structure. Landlord insurance does not cover your possessions — only the building. If the building that you rent an apartment in is destroyed by a fire, your landlord’s insurance coverage will cover the building itself. That insurance will not cover what you’ve lost in the fire if you don’t carry renters insurance.

For the most part, a landlord is likely to require that a tenant carry renters insurance for financial protection and to minimize the chances of having a liability claim against them. For example, say the apartment is broken into and the tenant’s laptop, TV and other valuables are stolen.

Without renters insurance, the tenant would be left to pay to replace those items out of pocket. But they may also be inclined to sue their landlord for the losses if they feel the break in was a result of the landlord not providing proper security to prevent against break-ins.

If a tenant has renters insurance, they’re much more inclined to simply file a claim for losses that damage their belongings. It also ensures the tenant has liability protection in the event someone is damaged on the property and sues.

In some states, such as California, landlords may be responsible for providing tenant relocation in the event of a natural or other disaster that makes a residence uninhabitable. Relocation is also often covered in a renters policy. So by requiring renters insurance, a landlord might be able to mitigate some of the expense of relocating tenants if it becomes necessary.

Your stuff, your policy

Having a renters insurance policy protects your belongings in the case of a loss. You might not think the second-hand items in your apartment amount to much, but you might be surprised at how much it would cost to replace all of it if something were to happen.

If someone were to break into your apartment and steal your laptop or other electronics, a renters insurance policy would typically cover the loss — a landlord’s policy would not. The bottom line is that to protect your possessions, you need a renters insurance policy.

The good news is that renters insurance policies are relatively affordable. So, when your prospective landlord tells you that having renters insurance is a requirement to signing the lease, it shouldn’t come as a surprise.

If your landlord requires you buy renters insurance, make sure you find a good company. See who others renters have ranked as the best renters insurance companies in your state.

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