This article was posted on Friday, Jan 01, 2016

Renters’ insurance can cost your tenants as little as $10 to $20 per month and could save you, as the landlord, thousands in claims, out of pocket expenses and insurance rate hikes.

A typical renters’ insurance policy covers property for the tenant’s belongings, emergency housing and moving expenses plus liability insurance which can serve as the primary insurance coverage in some claims.  A claim you or your insurance company could end up paying if there was no other coverage available.

Some of the coverages of a basic renters’ insurance policy includes: 

Liability Coverages

  • Covers acts of pets
  • Unintentional acts from the insured or qualified family members
  • $5,000 in medical payments for those injured on the premises regardless of liability
  • Emergency first aid for others
  • Damage to property of others – for example – a toilet overflows into a neighboring unit damaging their TV and sofa 

Property Coverages

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  • Theft or vandalism of tenants’ belongings
  • Loss of use – covers the cost of living elsewhere while the apartment is being repaired due to a covered claim, such as fire or water damage
  • Moving expenses and emergency housing in a loss situation whereby the unit is uninhabitable
  • Damage to property (their unit).  For example – the tenant causes a fire in their kitchen.  The apartment insurance policy would pay for the damage to the unit however, may come after the tenant for repayment.  If the carrier can subrogate and receive repayment, the landlord’s policy will have a lesser payout for the claim, thus decreasing the landlord’s policy “loss ration” which affects the rating and cost
  • Contents – damage or theft of your tenants’ belongings. 

It is suggested that the landlord is added to the renters’ insurance policy as an “Additional Insured.”  This not only gives the landlord notification if the policy cancels, but in some cases can extend coverage of the policy to the landlord.

Transferring these risks from your tenant to renter’s insurance policy is an inexpensive and easy solution.

Call your agent today to get a program started. They can provide you or your property manager with the basic information to start implementing a renters’ insurance program for your building.  Remember that you cannot make this a mid-term lease requirement however, you can implement this for new tenants and as existing leases renew.

[Editor’s Note:  On the following page is a convenient notice for your tenants regarding obtaining renters’ insurance.  GS Insurance Solutions is the exclusive endorsed broker for the Apartment Owners Association of California, Inc.  For more information on renters insurance or the full area of products and services they offer tailored to your specific needs, please call Anthony Miller or his team at 800-827-4262, email him at [email protected] or visit} 

This article is not meant to provide legal advice.

Stacey A. Scott is owner of Madison Avenue Insurance Group in Seattle.  Reprinted with permission of Rental Housing Association UPDATE.