Since renters insurance was not that prevalent in the marketplace a few years ago, it is still a relatively unknown product, especially for the average renter. However, it is gaining familiarity to both renters and landlords because of the increasingly litigious atmosphere in which we live. Some tenants see it as another expense, and in a tough economic environment, many are happy with the fact that renter's insurance is still largely voluntary. Landlords however, are realizing how important coverage can be and how it can protect them in case something goes wrong with a tenant or the apartment. Because of this revelation, more and more landlords are beginning to require renter's insurance as a factor for rental qualification, but many tenants are still resisting taking out a policy. But can a landlord legally require a tenant to have a renter's insurance policy in place?
But before answering that, let's delve into why tenants should want renter's insurance, whether it's mandatory or not. Many young and newer renters may not be familiar with the reason we have insurance in the first place. It’s not just because the state requires you to have certain types of insurance, such as automobile insurance. The reason you have insurance is so that in case something bad happens, namely something that would be financially devastating to your life and livelihood like a bad car accident, there is a backstop of sorts to help you through the process and pay the undoubtedly enormous bills that would otherwise fall at your feet.
In fact, without insurance in place to take care of those bills, you could be paying for that incident for decades. They’d be a huge financial strain and cause considerable stress in your life. Luckily, having insurance can prevent that financial stress from occurring.
A renter's policy protects you from several issues that could happen to your residence. If you get robbed, the insurance company helps replace the things that were stolen. If you cause a flood or fire, the insurance company helps pay for the damages. If a guest of yours slips and falls and sues you, the insurance company helps pay for the settlement. These are real things that do happen and again, you want to have the insurance company looking out for you in those times. It’s nice and dandy to think that those incredible streaks of bad luck will never happen to you, but guess what? They can, and for many, they do! Luckily, despite all that, major incidents are still rare, and that is why renter's insurance is relatively inexpensive. It typically costs around $120-$250 per year for fairly good coverage.
So can a landlord force you to have renter's insurance? The answer is no, as long as it isn’t stated as a requirement in your current lease. However, as soon as a lease renewal comes up, if the landlord does state in the lease that renter's insurance is required, you will have to get it or else you'd be violating the lease and therefore risk eviction.
However, whether you are required or not by the landlord to purchase renter's insurance should be a secondary consideration. It’s just a good policy to always have at least some insurance in place to cover your risks. Talk to your agent about the right coverage. Your primarily consideration should be that you need to protect yourself and your future wealth. And an inexpensive renter's insurance policy is just a smart move to make your life easier, just in case something happens!