If you’re struggling to understand the importance of renters insurance, remember Marie.
Marie was excited to move into her new Brooklyn apartment with her two best friends. Two stories with a backyard—a highly coveted living space sure to be an oasis of reprieve from the noisy NYC life bustling just blocks away.
As the movers unloaded her furniture, she happily unpacked boxes. She hung up clothes, decorated the walls, and set up all her tech. Finally, a place to settle into and call home.
However, less than a month after moving in, Marie came home from work to find burst pipes above her bedroom flooding her room.
After a frantic call to her landlord, her landlord promised to fix the pipes by the end of the week. But Marie just lost all her belonging—how would she replace such an expensive loss?
Purchasing your first rental property is just the beginning of your real estate journey, because being a good landlord is almost as important as making good deals. BiggerPockets’ free guide How to Become a Landlord: Managing Rental Properties for Real Estate Investors will teach you everything—from setting rent to handling evictions.
Why Should Landlords Require Renters Insurance?
Renters insurance is valuable to landlords because it ensures the tenant’s property is protected, minimizes their cost towards property damages as a result of tenant negligence, mitigates coverage disputes (i.e., who pays for what) if the tenant’s possessions are damaged or stolen while on the property, and reduces landlord’s liability in legal claims if a tenant’s guest is injured while visiting.
A random leaky pipe during a regular workday can quickly spiral to flood damage—forcing you to spend thousands of unexpected dollars!
Here’s the good news, if you can call it that: If Marie’s landlord required her to get renter’s insurance, her stuff would be replaced. We recently surveyed landlords on RentRedi and found only 33% require their tenants to get renter’s insurance. Another 30% require it based on the rental home.
Honestly, you might be thinking, “I’ve asked my tenant for a security deposit, rent, and now another bill to add to their list!” Here’s the thing—most renter’s insurance policies start at $8 per month.
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