As a landlord, one of the critical things you need to do is purchase landlord insurance to protect yourself. Tenants have the option of obtaining their own insurance. How can a landlord enforce tenant insurance and make it part of a standard contract? Rental insurance for renters should be mandated as it does provide help and assistance in the event of an accident, natural event, or other situation. In all fifty states, landlords do have the right to request tenants to purchase insurance. However, if there is a tenant who is part of the subsidized housing programs, you may not be able to require tenants to purchase insurance due to regulations.

Adding Renters Insurance to a Lease Agreement
Landlords do have the right to request tenants obtain renters insurance as part of their lease agreement. It is wise to consult with an attorney to ensure you are within the legalities of the lease when you do enforce this. If you already have tenants, you can create an addendum to the lease that does require insurance. Approach the topic with the renters to let them know this is an addendum, and offer them some options to purchase renters insurance.

Write a letter to the tenants to announce the new renters insurance requirement. Point out the changes to the lease and the policies and rules required for people to live there. As you will have tenants with different rental lease agreement dates, use a calendar with reminders to let you know when the tenant’s renter insurance will expire, so you can send a letter to ask for proof of the renewal.

Writing a Letter to Renters
The written letter you send to tenants does not need to be long winded, it can be as simple as the following:
“Dear Tenant,
One of the requirements to your lease is to purchase renters insurance. Each tenant must have at least (enter number here) of personal liability insurance coverage. The landlord disclaims any and all responsibility for damage to personal property due to fires and other situations.

    The renters insurance policy must cover all adults living in the unit. The renters insurance policy does require you to list our name (landlord name) as the “additional interest” party. The policy will alert (landlord name) in the event of your insurance policy being cancelled or expired. 

    Please provide a copy of the declarations page and proof of rental insurance as it is part of the requirements to rent/lease this property. Failure to maintain rental insurance will be considered a breach of contract and tenants will be subject to penalties and potentially eviction. 
    (Landlord Name and contact information)

Tenant Insurance and Landlord Protection
The main reason why tenant insurance is important to landlords is due to the number of tenants that are negligent. Far too often small fires lead to massive amounts of damage to the property, and potentially ruins housing for other people. Water damage from a leaky faucet, or an overflowing bathtub is another reason why tenant insurance is important! Insurance companies often look into who is responsible for causing the damage, and they could come after the tenant if they do not have protection with limited liability insurance.

Working with a property management company is one of the best ways to ensure tenants are purchasing rental insurance, and meeting the requirements of the lease. Landlords often find that working with property management companies like Keyrenter Property Management Annapolis, MD, does help to prevent tenant disputes and unpleasant situations that can arise in the day-to-day management of your property.