Mandatory renters insurance-Why it is a good policy to enforce.
Many investors aim to place their money in avenues that generate the greatest return with the least amount of risk involved. Some will study the economy and analyze market trends to help minimize risk; however, requiring tenants to obtain renters insurance is a simple way for investors to protect their real assets. Mandatory renters insurance helps owners/tenants in three ways.
1- It decreases their liability if tenants are sued. One example of this is an accident that occurs on the property to a tenants guest (i.e. someone slips on the tile and breaks their arm).
2- It insures tenant loses if something happens to their possessions in the home. This happened once when a home caught fire and all of the tenant’s possessions were burned. Because they had no renters insurance they did not recover any of their belongings.
3- It can lower an owner’s insurance rate since there is additional coverage associated with the property.
While renters insurance does not eliminate risk; making all tenants obtain a policy can add some additional protection to your real estate investments.