Why Landlords Require Renters Insurance
Have you ever wondered why landlords require renters insurance? Don’t they have their own insurance? Why should a landlord care what happens to a tenant’s personal belongings? Isn’t it up to the tenant to decide whether that 60″ flat screen TV and closet full of designer jeans is worth insuring?
If you’re a tenant: This article explains exactly what renters insurance covers, why your landlord requires it, and why it’s often actually in your own best interest (beyond just meeting lease requirements).
If you’re a landlord: If you’re not requiring renters insurance from your tenants yet, this explains why you absolutely should—and how it can protect you from expensive lawsuits and complications.
The reasons landlords require renters insurance actually make quite a bit of sense once you understand how the pieces fit together. Let’s break it down.
Quick Answer: Why Do Landlords Require Renters Insurance?
Landlords require renters insurance because it protects both parties and can help ensure tenants do not face undue financial hardship as a result of an insurable event. Specifically…
For tenants:
- Covers your personal belongings ($10K-$40K+ worth of stuff)
- Can cover temporary housing costs if apartment becomes unlivable
- Typically covers liability if you accidentally damage property or injure someone
- Usually costs only $15-$30/month (depending on coverage amounts)
For landlords:
- May prevent lawsuits when tenant belongings are damaged
- Helps ensure tenants can still pay rent after a loss
- Typically covers deductible on landlord insurance when tenant causes damage
- Can also protect against pet liability claims
Bottom line: As a tenant, renters insurance protects your stuff, helps prevent disputes with your landlord, and usually costs less than a couple of pizzas per month. It’s a relatively easy win for all parties, which is why most landlords now require it.
What Does Renters Insurance Cover?
Before diving into why landlords require it, let’s clarify what renters insurance is, what it typically covers, and how much you might expect to spend.
Three main coverages:
1. Personal Property Coverage
Covers your belongings if they’re damaged or stolen. This would often include the following:
- Furniture, electronics, clothing
- Sports equipment, jewelry (subject to riders)
- Bicycles, kitchen items, etc.
- Most things you own and store inside the rental
Typical coverage: $20,000-$40,000 (you typically choose the amount based on your situation and how much coverage you actually need)
2. Liability Coverage
Typically protects you if someone is injured in your rental or you accidentally damage someone’s property, as in the following hypothetical examples:
- Guest slips and falls in your apartment
- Your dog bites someone (subject to pet rider)
- You accidentally cause a fire that damages neighboring units
- You cause water damage to unit below yours
Typical coverage: $100,000-$300,000
3. Additional Living Expenses (ALE)
Usually pays for temporary housing if your rental becomes uninhabitable, for example:
- Hotel costs if there’s a fire
- Temporary apartment rental in case of a flood
- Extra food costs if you can’t use your own kitchen
- Moving and storage expenses
Typical coverage: $10,000-$20,000 or ~20% of personal property limit
Real example of how renters insurance might help you:
Let’s say you rent a 1-bedroom apartment. A quick inventory includes:
- Furniture (sofa, bed, desk, chairs): $3,000
- Electronics (TV, laptop, gaming console, phone): $4,000
- Clothing and shoes: $5,000
- Kitchen items, bedding, towels: $2,000
- Miscellaneous (books, decor, etc.): $1,000
Total: $15,000+ in stuff you’d have to replace if there’s a fire or break-in.
Cost to insure it: $15-35/month, depending on many factors including location.
Landlord Insurance Doesn’t Cover It
Why Landlords Require It: The Real Reasons
Reason #1: Landlord Insurance Doesn’t Cover Your Stuff
Let’s be clear: A typical landlord insurance policy only covers the building, permanent fixtures like cabinetry and plumbing, and any personal property owned by the landlord (appliances they provide, etc.).
What landlord insurance does NOT cover:
- Your furniture
- Your electronics
- Your clothing
- Your jewelry
- Any personal possessions you own
That means if there’s a destructive fire, flood, or theft, any loss to your belongings is not covered by the landlord’s insurance policy.
So what? Shouldn’t the tenant be able to take this risk?
Here’s why landlords care: Statistically, a high proportion of tenants who suffer losses without insurance decide to go after the landlord. Maybe a lock on a window was broken, or the landlord “should have known” about some condition that contributed to the loss.
Real scenario:
- Apartment catches fire due to faulty wiring
- Tenant loses $20,000 in belongings
- Tenant has no renters insurance
- Tenant sues landlord claiming negligent maintenance
- Landlord faces expensive legal battle even if they did nothing wrong
With renters insurance:
- Tenant files claim with their insurer
- Insurance company pays for belongings
- If there was landlord negligence, the two insurance companies work it out
- Landlord-tenant relationship preserved
Bottom line: Renters insurance strengthens the landlord-tenant relationship by eliminating situations that lead to suspicion, mistrust, and litigation.
Reason #2: Renters Insurance is Extremely Affordable
Another reason landlords require renters insurance is that it’s shockingly cheap—often less than your monthly Netflix subscription.
Typical costs:
- Basic coverage: $15-20/month
- With pet liability: $20-30/month
- Premium coverage: $25-35/month
Cost breakdown by coverage level:
| Coverage | Personal Property | Liability | Monthly Cost |
|---|---|---|---|
| Basic | $20,000 | $100,000 | $15-18 |
| Standard | $30,000 | $300,000 | $18-25 |
| Premium | $40,000+ | $500,000 | $25-35+ |
Potential ways to save:
- Bundle with auto insurance (10-25% discount)
- Claim smoke/carbon monoxide detectors credit (5% discount)
- Claim security system credit (5-10% discount)
Typical example:
- State Farm renters insurance: $18/month
- Covers $25,000 in belongings
- $300,000 liability coverage
- Costs $216/year total
On a monthly basis, that’s less than:
- Two months of Spotify ($13/month × 2 = $26)
- One dinner out
- Three extra-fancy coffees
For landlords: The affordability also serves as a tenant screening tool. If an extra $20-30/month is a financial stretch for a potential tenant, that’s often a warning sign that their ability to pay rent on time could be in jeopardy.
For tenants: If you’re a tenant looking to land a particular rental property, it’s wise to give the landlord every confidence in you by stepping up and happily agreeing to carry renters insurance.
Reason #3: It Covers Temporary Housing (Additional Living Expenses)
A key element of nearly all renters insurance policies is Additional Living Expense (ALE) coverage. This pays for temporary housing if your rental becomes uninhabitable. This doesn’t happen often, but when it does, it can be quite expensive.
Example situations where this matters:
- Fire renders your apartment unlivable for 2+ months
- Severe water damage requires extensive repairs
- Gas leak forces evacuation
- Fire in a neighboring unit makes your unit unsafe
What ALE might cover:
- Hotel or temporary apartment costs
- Extra food expenses (if you can’t use your kitchen)
- Moving and storage fees
- Pet boarding if needed
Typical scenario:
Your apartment building has a significant fire and repairs might take up to 3 months.
Without renters insurance:
- You might need to find and pay for temporary housing on your own
- Landlord may or may not be required to help (depends on state law and circumstances)
- You might still owe rent on an uninhabitable apartment (depends on lease)
- Financial and emotional stress is considerable
With renters insurance:
- ALE coverage could pay for 3 or more months of hotel/temporary housing
- You’re not scrambling to find $4,000+ for emergency housing
- Insurance handles many things directly so you can focus on daily life
For landlords: When tenants have ALE coverage, you avoid situations where:
- Tenant can’t afford temporary housing and demands you pay for it
- Tenant withholds rent claiming uninhabitability
- Tenant sues for “constructive eviction”
- You end up covering relocation costs to preserve the tenant relationship
ALE coverage works to protect both parties and preserve the working landlord-tenant relationship.
Reason #4: Landlords Don’t Like Paying Deductibles
Just because a landlord carries insurance doesn’t mean they’re immune from writing checks to cover losses. Indeed, many landlords choose not to file claims for minor incidents even when covered. Why?
Filing claims can often lead to:
- Premium increases in future years
- Potential denial of insurance after multiple claims
- Deductible exposure ($1,000-$5,000 out-of-pocket)
How renters insurance helps:
If tenant action or behavior results in a loss, the required renters insurance will typically cover the landlord’s deductible, thereby making sure the landlord has no financial exposure.
Example scenario:
Tenant leaves ritual candles burning while attempting telepathy with ancestors and starts a small kitchen fire. The resulting damage will cost $8,000 to repair and the kitchen is unusable for weeks.
Without renters insurance:
- Landlord files claim on landlord policy
- Landlord pays $2,500 deductible
- Landlord’s premiums increase
- Landlord potentially sues tenant for deductible
- Tenant-landlord relationship may be beyond repair
With renters insurance:
- Tenant’s liability coverage pays the claim
- Landlord’s deductible is covered by renters insurance
- Landlord doesn’t file claim on own policy
- Landlord’s premiums and future insurability are unaffected
- Relationship preserved (maybe)
For landlords: Renters insurance works to reduce or eliminate your out-of-pocket risk when tenant actions cause damage.
Reason #5: Pets Need Insurance Too
Cats and dogs are usually reliable companions, but sometimes they get confused and mistake the plumber for a burglar. Dog bites can lead to very expensive medical bills and lawsuits. Renters insurance can help ease everyone’s pain in these unfortunate situations.
Examples of pet liability risk:
- Dog bites delivery person: $20,000-$30,000+ in medical bills
- Cat scratches guest who develops infection: $10,000+ claim
- Pet damages neighboring unit: $5,000-$15,000 repair costs
Who gets sued when tenant’s pet causes injury?
Often, both the tenant AND the landlord. Even if the landlord had no way of preventing the incident, they can be drawn into expensive litigation.
With renters insurance that includes pet liability:
- Tenant’s policy typically covers the medical bills (up to a point)
- Tenant’s policy may cover legal defense
- Landlord gets a first line of defense to protect from lawsuits
- Insurance carrier handles settlement negotiations
For landlords that allow pets: Making renters insurance mandatory (with pet liability coverage) is a smart move. Otherwise, you may be assuming massive liability risk.
For tenants with pets: Most renters policies automatically include pet liability for cats and dogs but be sure to ask and check the fine print. May cost extra $5-10/month for certain breeds.
Reason #6: Tenants Can Actually Pay Rent After a Loss
The added expense and stress tenants experience when recovering from significant property loss can put their ability to make rent payments in jeopardy.
Example scenario without renters insurance:
Break-in results in $5,000 stolen property (laptop, TV, gaming console, jewelry). If the tenant has no renters insurance…
- Has to replace essentials out-of-pocket
- May max out credit cards
- Likely can’t afford next month’s rent
- Landlord may start eviction proceedings
- Everyone loses
Example scenario with renters insurance:
Same break-in, but tenant has renters insurance…
- Tenant files claim within days
- Receives $5,000 payout (minus $500 deductible)
- Replaces stolen items
- Ability to make next rent payment unaffected
- Landlord-tenant relationship stable
For landlords: Tenants who are better insulated from financial shocks are more likely to pay rent on time, every time.
Reason #7: Trust, But Verify
It’s one thing to agree to a renters insurance requirement in the lease, and quite another to actually maintain coverage.
Landlord best practice:
Insist on being named as an “interested party” (also called “certificate holder”) on the renters insurance policy.
What this does:
- Landlord receives notification if policy lapses
- Landlord receives notification if policy is canceled
- Landlord can verify coverage is actually in place
How it works:
- Tenant gets renters insurance
- Tenant asks carrier to add landlord as interested party
- Carrier sends certificate of insurance to landlord
- Landlord receives automatic notification of any policy changes
Note: “Interested party” is different from “additional insured.” Interested party just means you get notifications. You don’t actually have coverage yourself under their policy.
For tenants: This is standard and easy. Just give your insurance company your landlord’s name and address. They handle the rest.
Common Tenant Questions & Concerns
“Do I Really Need It? I Don’t Have That Much Stuff”
You probably have more than you think. Quick test:
- Could you replace everything in your apartment for $5,000? $10,000? $15,000?
Most people underestimate the actual cost of replacing all of their possessions. And liability coverage (if you accidentally injure someone or cause damage) is arguably even more important than property coverage.
The real question: Can you afford to replace everything you own after a fire? If not, $15-25/month starts to seem like a real bargain.
“My Landlord’s Insurance Should Cover This”
No, it doesn’t actually. Landlord insurance typically covers:
- The building structure
- Landlord-owned appliances/fixtures
- Landlord’s loss of rental income
It does NOT generally cover:
- Your belongings
- Your liability for injuries you cause
- Your temporary housing if displaced
“I’m Only Renting for a Year, It’s Not Worth It”
Renters insurance is month-to-month. If you only need it for 6 months, you only pay for 6 months. You can spin it up and down as needed with very little effort!
Cost for 6 months: $90-150 total
Cost if apartment burns down or there is a break-in: Up to everything you own
“Can’t I Just Get It When I Move In and Then Cancel It?”
Savvy landlords require proof of continuous coverage. If your landlord is named as an interested party on the tenant’s policy, the landlord will be notified if coverage lapses. This could result in:
- Lease violation
- Needless friction with your landlord
- Eviction in extreme cases
Bottom line: It’s probably not worth risking your lease to save $20/month.
For Landlords: How to Require Renters Insurance
Include It in Your Lease
Add language to your lease agreement that obligates the tenant to secure renters insurance with clear coverage minimums.
Sample clause (for informational purposes only):
“Tenant agrees to obtain and maintain renters insurance throughout the term of this lease with minimum coverage of $100,000 liability and $20,000 personal property. Tenant shall name Landlord as an interested party on the policy and provide proof of insurance before move-in. Failure to maintain continuous coverage constitutes a material breach of this lease.”
Verify Before Move-In
Don’t hand over keys until you’ve received:
- Certificate of insurance or other satisfactory proof of coverage
- Confirmation you are listed as an interested party
- Evidence that the policy will be in effect on the lease start date
Monitor Throughout Tenancy
If you’re named as interested party, you should in theory be automatically notified by the insurance carrier of any:
- Policy cancellations
- Policy lapses due to non-payment
- Coverage changes
Recommended Minimum Coverage
For landlords, you may want to consider requiring:
- Liability: $100,000 minimum (prefer $300,000)
- Personal property: $20,000-$30,000
- Pet liability: If you allow pets, ensure coverage includes animal liability
FAQ
Typically $15-30/month depending on coverage amount and location. A policy with $25,000 personal property coverage and $300,000 liability averages $18-22/month nationally. You can sometimes get discounts by bundling with auto insurance (10-25% off) or providing evidence that smoke detectors are installed.
Typically, it covers three main categories: (1) Your personal belongings if damaged/stolen, (2) Liability if you accidentally injure someone or damage property, (3) Additional living expenses if you need temporary housing. It does NOT cover the building structure (that’s the landlord’s insurance) or your roommate’s belongings (they need their own policy).
Yes, absolutely. Landlords can require renters insurance as a condition of the lease. This is allowed in all 50 states and is increasingly common. If you refuse, the landlord can decline to rent to you or pursue lease violations if you agreed to it in the lease and then let coverage lapse.
If it’s in your lease and you don’t comply, you’re in violation of the lease agreement. At your landlord’s option, consequences might include denial of your rental application, default rent increase (some leases add $25-50/month if no insurance), or even eviction for material breach of the lease in extreme cases.
No. Each person (or family unit) generally needs their own renters insurance policy. Your policy only covers your belongings, not your roommate’s. If you both want coverage, you each need to purchase a separate policy, or some insurers allow “joint” policies for domestic partners. Ask your insurance carrier how best to handle co-living situations.
Usually, yes—that’s what most liability coverage accomplishes. If you accidentally start a fire (left stove on, candle tipped over, etc.), your renters insurance liability coverage will typically cover damage to the building and neighboring units. This works to protect both you and your landlord from massive out-of-pocket costs.
Call your insurance carrier or log into your online account. Provide your landlord’s name and mailing address. The insurer will mail a certificate of insurance to your landlord. It takes 5 minutes or less and is usually free. This allows your landlord to receive notifications if your policy lapses.
Technically yes, but if your lease requires continuous coverage, canceling it violates your lease. Your landlord (if listed as an interested party) will be notified immediately and can pursue lease violations, charge default fees, or in extreme cases, begin eviction proceedings.
Ready to Get Renters Insurance?
For tenants: Renters insurance typically protects your belongings, covers you if you accidentally injure someone or cause damage, and can pay for temporary housing after a disaster. At $15-30/month, we think it’s one of the smartest insurance purchases you can make—regardless of whether your landlord requires it.
For landlords: Requiring renters insurance can help protect you from lawsuits, ensures tenants can pay rent after a loss, often covers your deductibles when tenant actions cause damage, and works to preserve the landlord-tenant relationship when things go wrong. We think it should be a non-negotiable part of your lease.
Getting started is easy…
For tenants looking for coverage: Get instant quotes from top carriers and have coverage in place within minutes.
For landlords who don’t require it yet: Update your lease template to include renters insurance requirements. Sample clauses are available from legal document providers.
Related resources:
- Vacation Rental LLC Guide – Structuring your rental business
- Landlord Insurance Costs – How to reduce your own insurance expenses
- Property Manager Fees – What PMs charge and what’s included
