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HUGE RISKS OF NOT REQUIRING RENTERS INSURANCE
Tenants often assume that because the building is insured, their belongings and personal liability are covered too. In reality, a landlord policy is designed to protect the property owner, not the tenant’s personal property or the tenant’s liability exposure. That gap matters, especially when something goes wrong and it almost always does eventually. Some landlords also hesitate because they believe requiring renters insurance is not legally allowed, or they worry it will create friction during leasing. But in most markets, landlords can require it as part of lease terms so long as it is implemented properly, such as at lease signing or renewal. In general, requiring renters insurance is widely accepted and increasingly common, particularly as insurance costs rise and liability claims become more expensive. Renters insurance is typically intended to protect tenants in four major ways: personal property coverage, personal liability coverage, additional living expenses (loss of use), and guest medical payments. That same protection can also reduce risk for landlords, not because it replaces landlord insurance, but because it adds a crucial layer of coverage between a tenant’s everyday life and a landlord’s financial exposure. Following are five of the biggest risks landlords take when they do not require renters insurance and why this small lease requirement can prevent major headaches later.
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