Many landlords see renter’s insurance as a benefit only to the tenant—but it also offers a layer of protection for property owners. Requiring tenants to carry renter’s insurance can significantly reduce the landlord’s risk exposure when things go wrong.
First Line of Defense in Liability Claims
One of the biggest advantages of renter’s insurance for landlords is that it serves as the first line of defense in liability situations caused by the tenant. For example, If a tenant’s dog bites someone and both the tenant and landlord are sued, the tenant’s renter’s policy may step in to cover the damages.
This kind of primary coverage helps minimize the likelihood that a landlord’s insurance premiums will increase due to a claim or that they’ll face uncovered losses.
Not All Policies Are Created Equal
Landlords and property managers should be aware that not all renter’s insurance policies offer the same coverage. While many include protection for personal property and liability, some may exclude bodily injury claims or certain types of damage.
That’s why it’s important to require renter’s insurance through the lease agreement and consider including minimum coverage requirements. For example, a lease may specify that the tenant must carry a policy with:
- Personal liability coverage of at least $100,000
- Property damage coverage
- Coverage for guest injuries on the premises
It may also be wise to request a copy of the tenant’s policy or have them list the landlord or property manager as an interested party.
Lease Language Matters
Including a renter’s insurance clause in the lease is critical for enforcement. Most professional lease agreements used by property management companies now include such provisions.
Under Texas law, landlords have broad discretion in drafting residential leases, including the ability to require tenant insurance. However, the lease must clearly spell out the requirement, and landlords should avoid misleading language or overreaching claims that might invalidate the provision.