Landlord Requiring Renters Insurance:
As a landlord in Virginia you can and should require tenants to maintain renters insurance as a requirement of the lease. You can also require that they list you as an additional interest on the policy so that you receive notice from the carrier if that policy cancels during the term of the lease. This benefits the landlord as much as the tenant.
Tenant’s often assume that a landlord’s insurance policy covers their personal property in the event of damage to the dwelling and that the landlord is required to provide them with temporary housing in the event of major damages such as a fire. Their own insurance company should be handling these damages while the landlord handles their own losses.
For a tenant, it’s relatively inexpensive, often less than $20 per month. If you require renters insurance and your applicant complains that he can’t afford it, that’s a red flag before you review the application.
If someone can’t afford to pay the low monthly rates for renters insurance, what are the odds that they won’t have the monthly rent money?
Example Liability Exposure:
A tenant hosts a birthday party and one of their guests is injured. The tenant doesn’t have renters insurance to cover their liability and the guest has no health insurance either. Lawsuit is filed against the landlord as the property owner. The landlord’s insurance may pay the suit under their liability but will leave a liability claim on their loss history causing future premium increases. If the tenant had renters insurance, the landlord wouldn’t be facing the damages.
Sample Lease Clause:
Here’s a sample lease clause that you could use to require renters insurance, however please have a local attorney review the clause above for your own usage. I am not a lawyer, nor is this legal advice.
REQUIRED RENTERS INSURANCE: Landlord does not maintain insurance to cover the personal property of Tenant(s) or personal injury to Tenant(s), their guests or occupants. Tenant(s) is required to obtain rental insurance in the amount of $300,000 liability and list the landlord as an additional interest on the policy. Tenant(s) is responsible to obtain insurance and provide proof of insurance before they can obtain the keys to the Premises.