You may think that your landlord insurance policy will protect you no matter what goes wrong in your Philadelphia rental property. Unfortunately, covering your rental property is more complicated than that. A landlord insurance policy may save you thousands of dollars, but it turns out renters liability insurance could save you thousands more.

What is Renters Liability Insurance?

Renters liability insurance is a portion of renters insurance. Renters insurance includes personal property protection for tenants, liability protection for tenants, protection from increased living expenses, and guest medical protection. The liability protection is of primary interest to landlords like you because it can end up saving both you and your tenant a lot of money. If your tenant was responsible for flooding the bathroom after forgetting to turn off the faucet, they would be held liable for the damages (the warped flooring, the bathtub that crashed into the downstairs living room, whatever the case may be.) Renters insurance would cover the cost associated with that liability up to $100,000 (for most plans.)

What Does My Landlord Insurance Cover?

Landlord insurance does not cover the situation listed above. Instead, landlord insurance protects you if one of your tenants or their guests steal from you, if a tenant or guest intentionally damages or vandalizes the rental property, if you lose rent because of tenant default, or if you are asked to pay legal expenses to evict a tenant. So how do you protect yourself against damages that are accidentally caused by renters?

Should I Require My Tenants Have It?

If the forgetful tenant from a few paragraphs up had not had renter’s insurance, they would have been expected to pay out the damages caused by the flooding and the falling bathtub in full. That sounds alright. You still are not responsible for paying the damages, your tenant is! Unfortunately, your tenant might not be able to pay off the damages in full. The added financial strain could lead to them paying rent late or even defaulting on their lease. If the tenant had renters insurance, the insurance would cover the damages of the flood and the fallen bathtub up to $100,000 (or whatever the policy amount may be.) The tenant is no longer responsible for the repair costs and can continue to pay their rent on time. So now you see why renters insurance is beneficial. Many landlords require that tenants have renters insurance by including a clause about it in the lease agreement. This is an excellent way to ensure your tenant’s (relative) financial stability.

If you need help adding a renters insurance clause to your current lease, or if you need help drafting an entirely new lease, Keyrenter Main Line will step up to the plate. We would love to help you make the most out of your rental property, and you can’t do that if your tenants don’t have renters insurance. Give us a call and find out what we can do for you today.