There is a large gap between homeowners and renters, and it isn’t a front lawn. Only 37% of renters have renter’s insurance while 95% of homeowners have homeowner’s insurance. There have been several justifications for this difference, but many don’t stack up. Some say it’s because renters think their landlord’s insurance policy will cover their property damage; others claim it’s because renters do not own enough possessions to make insurance worthwhile. Renter’s insurance provides a range of services that can only be truly valued after a claim has been made. While some tenants will see the insurance only as an extra monthly expense, requiring them to have a policy can benefit both you and your tenant in the long run.

Blame Game

One of the benefits of your tenants having renter’s insurance is to minimize the culpability on your part when accidents happen. There are many cases where the landlord becomes the default when disaster occurs. Requiring tenants to have renter’s insurance will help your tenant feel secure if tragedy strikes, but also can give you security in the form of liability coverage.


Many landlords are hesitant to require an insurance policy. Some think it will turn prospective tenants away or are reluctant to dedicate time to tracking tenant’s policies. However, the average renter’s insurance costs less than $20 a month, which shouldn’t be a problem except for the most financially strapped renters.

Like every legal matter, policies vary from state to state. Be sure to check what your local law says about requiring renter’s insurance in a tenant agreement.

Policy Protector

To maintain some peace of mind, it is always a good idea to require your tenant to send proof of insurance regularly. A simple way to do this is to have it as a requirement for lease renewal. Prospective tenants may be unsure of how to acquire renter’s insurance, and while every major insurance provider has rental coverage, it is always a good idea to have a suggestion to give in case the question arises.