Answering the Big Questions: Should Landlords Require Renters Insurance?

Posted on June 2, 2019

It only takes 30 seconds to lose everything.

A small flame only needs half a minute to grow into a ravenous fire, and it happens more than you think. Every single year there are about 24,000 house fires in Canada alone. 

Victims of house fires, find themselves scrambling to try and put their lives together again. Unprepared for the major financial loss, they are often left without any belongings, or anywhere to live.

Luckily, you can protect yourself, and your tenants, by requiring them to carry renters insurance. If your tenant loses some of their belongings because of a fire, theft, or storm, their insurance policy can pay to help replace them. The policy will also pay out money to the landlord, to help cover the cost of repairs to the rental property.

While your tenants wait for you to make the house livable again, their policy can once again save the day by paying for additional living expenses. Yet, that's not all these powerful policies can do. Tenant's insurance helps protect you and your tenants from expensive lawsuits, resulting from deaths, injuries, and so much more.

Read on to learn everything you don’t know, but should, about requiring your tenants to carry insurance.



Renters Insurance and Personal Liability

Personal liability is the coverage your tenant will need if one of their guests sustains an injury. Here are some examples of instances when personal liability can really save the day.

Slip and Fall

It’s scary to think about it, but people die every year from falling down the stairs. 

Studies show a little over 1,000 people die every year, as a result of falling down a flight of stairs. That's because, stairs are the most likely place for death, or serious injury to occur in a household. The risk only goes up when you’re dealing with elderly people.

If your tenant has a guest over, and they trip and fall down the stairs, the liability will help pay for their injuries. In the event your tenant doesn’t have any liability coverage, the guest could then seek restitution from the landlord’s insurance policy. Yet, if your tenant is carrying the right limits of liability, their policy will be able to handle everything, without needing to involve you.

Dog Bites

Do you allow your tenants to own pets? If yes, then you absolutely need them to carry renter’s insurance. Doing so will help you weed out any tenants, that may be the owner of a dangerous dog breed.

There are about 5 different dog breeds that most insurance companies prohibit policyholders from owning. While all dogs deserve the chance to find love, that doesn’t mean you should have to pay for it. Instead, protect your assets by requiring your tenants to carry high liability limits when they have pets.

Additional Liability Coverages

So far, we’ve briefly reviewed how liability coverage can help with slips, falls, and dog bites. Here are a few more situations, liability can help with.

Swimming Pool Accidents

Drowning is the number one cause of death for children between the ages of 1-4, who live in British Columbia.

A tenant can be liable for someone drowning, even if the individual wasn’t a guest at their home. For example, if a child who sneaks into the tenant's property, and drowns in their uncovered pool, the tenant is still responsible. Failing to securely cover their pool, makes them liable for any injuries or deaths that occurred as a result.

Workers on the Property

When a worker injures themselves on the property, the liability will help pay for their injuries. It could be something as simple as a gardener, tripping over a raised tree root. If the tenant didn’t warn the gardener about the tree root, the tenant's liability will help pay for the injuries.

Tree Damage

It’s your tenant's job to notify the landlord about any problematic trees that pose a threat or have a disease. If they fail to do this, and the tree causes damage, the tenant’s liability portion of the policy will have to pay for the damages.

Drunk Guests

If your tenant decides to have a party that serves alcohol, they will be the one liable for any injuries that occur to their guests. Should an intoxicated guest die, the liability will also help pay for the damages.

Personal Liability and Negligence

The tenant will only use their liability if the injury is their fault. That means, the injury was preventable, and not a result of the guest’s clumsiness. For example, if a guest is texting on their phone, and slips down the staircase, they will be responsible for their own injuries.

Yet, if the guest slips on a dog toy at the top of the stairs, the fault or “liability” belongs to the tenant. When the tenant is at fault, their liability works to cover the damages.

Please keep in mind, that it’s still the landlord's responsibility to provide their renter with a safe property to live on. If any part of the property is unsafe due to the landlord's negligence, the liability may rest with the landlord. For example, if you fail to take care of the hole in the yard, and your tenant's guest sustains an injury by falling in it, you'll be the one responsible.

Covering Renter’s Belongings

Your renters will get to choose how much coverage they need for their personal items. Renter’s without a lot of belongings may opt to only cover $5,000 worth of their belongings. Yet, a renter who has a lot of electronic equipment, or expensive machinery, may decide to carry a higher limit, perhaps closer to $15,000.

Increasing Coverage Limits for Personal Items

If the renters have additional items that exceed the coverage limits, they can usually purchase additional coverage. For example, you may have a tenant who owns a lot of expensive jewelry. Since, the renter’s policy will have a limit, for how much it can pay out for stolen jewelry items, this tenant may decide to purchase additional coverage.

Deductibles for Personal Items

If you currently have a homeowners insurance policy, you already know how high some of the deductibles can be. Luckily, when you’re dealing with insurance for renters, the deductibles are considerably lower. This works great for you, the landlord, since you don’t want your tenants to become financially depleted in the event there’s a major loss of property.

Damages Covered for Personal Belongings

Many tenants believe that their renter's insurance will cover their belongings, in the event, they break due to human error. While other types of insurance, like cell phone insurance, may work that way, renter’s insurance does not.

A policy will only cover the tenant's belongings, if the damage that occurs, was out of the tenant’s control. Here's a short list of some of the events a policy would help with.

In addition, the tenant will need to prove that negligence didn’t play a part in causing the damages.

Negligence and Theft

If a theft occurs, the insurance company is going to ask the tenant if they locked all of the house’s doors. If the theft occurred because the tenant left the front door open, it’s not likely they will receive a payout from their policy. Contrarily, if the thieves broke down the front door, the insurance policy will help cover the cost of the broken door and the lost belongings.

Alternative Living Coverage

Finally, another benefit of renters insurance is the coverage it provides for alternative living expenses. In the event your tenant has to stay somewhere, other than the rental property, their insurance policy may be able to help cover the living expenses.

For the coverage to apply, the rental property would have to be currently unlivable, due to some type of peril. This could mean water damage, fire damage, or any unlivable conditions brought on by a major storm.

Many of your tenants aren’t going to be aware of all the benefits an insurance policy can provide them with. When you take a moment, to explain how policy can help protect them financially, they’ll know they’re dealing with a quality landlord.

Here at Insurdinary.Ca, we are proud to help you find the best, and lowest, insurance rates. That's why we provide our customers with a variety of options, to find the insurance policies that are a perfect fit for them.

One of the ways we do this is by providing clients with name brand comparison quotes. This way, they know for certain, they are getting the best price, and coverage available. Take moment to get a quote, and find out how much a standard renter’s policy will cost. 

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