Landlords and apartment owners are reluctant to place restrictions and requirements on renters since it could cause them to look for housing elsewhere.

While understandable with regard to some aspects such as smoking on the premises or allowing pets — there is one requirement that should not be ignored: Renters’ insurance.

Protection for the landlord and renters

Many renters are under the assumption that if they are living in an apartment or rented building, they are protected under the landlord’s insurance policy. This is only partially correct.

Most insurance policies held by a landlord will cover damage to the structure of the building and very limited coverage for certain types of negligent situations, such as a landlord who is required to treat iced sidewalks. If the sidewalks weren’t treated and a tenant slipped and fell, the policy might provide coverage for any medical bills.

Coverage for personal belongings that may be damaged by storms, theft or fire is not provided to renters under the landlord’s insurance policy. Injuries that occur to guests and even damage caused by other renters, such as a hot water tank leaking, may not be covered either under a landlord’s insurance policy.  However, these situations would be covered under a Renters’ insurance policy.

Requiring, or at least strongly encouraging, renters to carry Renters’ insurance protects not only the individual renters, but also the landlord and apartment owner, as well as the other renters in the building.

Every Renters’ insurance policy will vary depending upon the company that provides coverage, how much coverage is purchased and the exact situation — but the following are some examples of situations where renters insurance will prove invaluable:

1. Coverage for theft of personal belongings

The FBI estimated that there were over 2 million burglaries in the United States in 2010. In the event renters are victims of a burglary and their personal belongings are stolen, Renters’ insurance will provide coverage to help replace the items that were lost.

Some Renters’ insurance policies will also provide coverage if the personal belongings are not in the home. For example, if you go on vacation and a laptop is stolen from the hotel room, Renters’ insurance may provide help replacing that laptop if you file a claim.

2. Protection against dryer fires

Dryer fires are more common than people think. The U.S. Fire Administration estimated that there are approximately 2,900 dryer fires a year that account for close to $35 million in property loss or damage.

Renters’ insurance can provide protection to renters in the event a dryer fire should occur. Renters’ insurance will provide compensation for loss of personal belongings, damage to other renters’ belongings, replacement of the dryer and other damaged appliances, and any structural damage that may have occurred as a result.

3. Help with living expenses when displaced by a storm or other natural disaster

Renters who find themselves displaced after a tornado, hurricane, fire or other natural disaster may be able to seek help from their Renters’ insurance.

Renters’ insurance may provide compensation that will help these individuals find temporary lodging. If relocation services are needed because the building is uninhabitable or not able to be restored, the Renters’ insurance policy may help with that, too.

4. Getting proper Renters’ insurance coverage

There are dozens of different types of Renters’ insurance and all do not provide the same type of coverage. Here are some suggestions for do’s and don’ts associated with Renters’ insurance for apartment owners/landlords:

• Make sure personal liability is included.
• Determine how much coverage may be needed to cover repairs caused by damage.
• Make sure coverage includes unexpected actions — storms, neighbors causing damage, theft, etc.

Even though it isn’t the responsibility of landlords/apartment owners to know this information, it can help them determine what type of insurance to encourage renters to purchase, and how much coverage may be needed to provide protection for the property/tenants.

5. Keeping insurance premiums down

A common fear landlords have regarding Renters’ insurance is their tenants may believe the monthly premium is too high to pay.

Luckily, there are things landlords and apartment owners can do to help keep Renters’ insurance premiums to a minimum:

• Regularly maintain the property by cleaning gutters, dryer vents and other potentially hazardous areas.
• Implement safety measures on property — proper trash disposal, requiring tenants to notify landlords/maintenance of anything that needs to be fixed.
• Require all tenants to carry a minimum Renters’ insurance policy from a reputable insurance carrier.

Renters’ insurance can be invaluable should the unexpected happen. It will protect not only the landlords/apartment owners, but all tenants who live in the building or on the property.

Jeff Cronrod, a board member of the Calabasas, Calif.-based American Apartment Owners Association, has more than 40 years of experience as a landlord and has owned, rehabbed, developed and managed more than 4,000 rental units throughout the United States. 

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