According to this interesting blog from Rent.com, living in an apartment is the 2nd most satisfactory living situation. Due to this, thousands of people are flooding the apartment sector to find their ideal living space. However, when applying, a landlord might request you to purchase renters insurance before moving in. But why do apartment landlords require renters insurance?
Apartment landlords require you to have renters insurance because it benefits both themselves and the tenant. For instance, if everyone has renters insurance on their unit, the landlord will receive lower insurance premiums as it won’t need to cover each property. Whereas with the tenants, all their goods will be protected from fire or theft.
There’s an abundance of different reasons behind landlords making renters insurance a mandatory obligation. Therefore, to understand this further, you’ll want to become familiar with the below.
Here we discuss exactly why some landlords request this before allowing you to move into your apartment officially.
Why Would An Apartment Landlord Require Renters Insurance?
Notably, not all landlords will make their tenants purchase renters insurance. But whether they enforce this or not, it’s an excellent idea to obtain this type of coverage.
Here are some reasons why your landlord or property owner will need you to purchase renters insurance before moving into the property.
Reduction Of Liability
The first and most prominent reason you’ll be asked to purchase this insurance is that it’ll lower their liability. Within the real estate world, lawsuits can quickly appear from anywhere.
Because of this, landlords need to guarantee they’ve got their backs covered in any situation.
By making renters insurance a compulsory necessity, tenants are less likely to take legal action towards their landlords. After all, they’re covered in most situations, so they can claim from the insurance instead of asking the landlord.
Eliminates Payments For Unfortunate Events
If you encounter devastating flooding, fire, or any other damages caused by natural disasters that damage personal items, the likelihood of the landlord replacing your goods is almost non-existent.
After all, they didn’t pay for the belongings, so why would they pay to replace them? But, if a situation like this occurs, tenants will undoubtedly ask the landlord to try and return their damaged goods.
They know this is a possible situation and not a pretty one. Therefore, it’s another reason why they would ask you to purchase renters insurance.
In most events, this type of coverage will compensate for your damaged belongings and temporary accommodation if the apartment doesn’t offer suitable living conditions.
Lowers The Landlord Insurance Premiums
Additionally, if the entire apartment block has renters insurance that covers their units, the insurance premiums the landlord will pay for the building will be much cheaper.
Therefore, it’ll boost their overall profits per renter in a specific apartment block.
Because the landlord’s insurance will only need to cover parts of the building that renters don’t accompany, it is significantly less expensive.
So, although the tenant will receive immense benefits from this coverage, landlords will also.
Remove Bad Tenants
Also, it weeds out the possible bad tenants from requesting a lease agreement. If an individual cannot afford renters insurance to move into an apartment, it’s a huge red flag for landlords.
After all, if they can’t budget for this type of coverage (usually around $14 each month), they undoubtedly have financial difficulties.
Peace Of Mind
Lastly, it provides the tenant and landlord with peace of mind knowing each other is completely covered in any unfortunate situation. Nobody wants to worry about these circumstances.
Therefore, getting tenants to purchase renters insurance eliminates this. Paying an extra $14 a month to gain peace of mind is an incredible deal.
What Does Renters Insurance Cover?
Now you understand why some landlords will require you to have renters insurance before moving into their property. I’m sure you’re eager to know what renter insurance will cover for the tenant. Here’s what you need to know:
Personal Possessions
Renters insurance was created primarily to cover the damage or the loss of items within an apartment building (or any rental property) like furniture and appliances.
Usually, when this situation occurs, tenants will receive two options from the insurance company: to replace the physical goods or the cash equivalent.
The choices that’ll be presented will also depend on the nature of the item that’s covered with the insurance.
Notably, if you purchase “premium” insurance, your personal belongings might also be protected off-premises.
If you enroll in coverage that includes this, you’ll reek an immense number of benefits knowing that your goods, such as a telephone, expensive bag, or ring, are protected within and outside your property.
Liability
Included with the above coverage, tenants will receive liability protection if any lawsuits are filed against them.
It covers all types of court fees, medical expenses if someone suffers an injury in your apartment, along with various other legal protection.
As you can imagine, all policies have their limit, so you’ll want to understand where your insurer crosses the line.
Additional Living Expenses (ALE)
Undoubtedly your renter’s insurance will include additional living expenses or otherwise known as ALE. If the apartment unit becomes damaged and makes the living conditions unsuitable, you’ll need to pay for temporary housing.
All costs required to ensure you have adequate living until your apartment is fixed will be covered because of the ALE eligibility.
However, same with the above, there are limits to how much you’re able to claim based on the insurance you opted in for.
Typically, the more ALE coverage you choose, the more expensive the monthly premiums will be.
After reading the above, you should have a solidified idea of why apartment landlords require renters insurance.
In all honestly, it makes sense. It allows both the tenant and landlord to be covered in all types of different situations which could occur.
Therefore, instead of encountering financial difficulties, paying a small monthly fee is undoubtedly worth it and recommended.