The rental agreement between a landlord and tenant rests on one guiding principle: trust. Landlords aren't in the property management business because it's easy and stress-free. They chose this responsibility not only to have an extra stream of income but also because of how rewarding it can be to provide a safe, comfortable place for renters to land until they're ready to purchase their forever home. In return for providing housing for tenants, landlords expect them to respect and care for the property as if it was their own. On the flip side, renters expect their landlords to come to the rescue and resolve any property issues that may arise during the leasing period.

We may be slightly biased, but the best way to maintain that cordial, trusting relationship on each end of this legal arrangement is by having two strong insurance policies in place to protect everyone involved. You know, kind of like a dynamic duo of coverage that saves the day when things sticky.

Landlords, we've got a little truth bomb that may or may not come as a big surprise to you.

According to Forbes, most tenants don’t think they need renters insurance. More than half of adults ages 23 to 29 years old who rent their homes haven’t bothered to take out renters insurance, putting all their stuff at risk. Simply put, they just don't see the value in it. Either they underestimate the total cost of their possessions or are under the misconception that you - their landlord - is responsible for their belongings since those items fill up your rental property. Therefore, why would they spend money on a renters policy?

Of course, you know your insurance policy on the rental home doesn't cover your tenants' personal property in the event of a loss. But, what if you could help each of your tenants understand that too with some straightforward renters insurance education worked into every rental agreement you both sign? What if such convincing messaging was the key to persuading your renters to protect their stuff - which truly does add up in value - and save you a world of unnecessary conflict if a claim situation were to occur? After all, the bill to replace even a minimal amount of lost property can cost thousands of dollars, and the last thing you want for your tenants is for them to struggle with paying for such an unexpected expense. 

If you’re on the fence about making renters insurance required for your tenants, check out just how heroic it can be in your renting endeavors.

Uncomplicated Coverage: Here's What Renters Insurance Protects For Your Tenants

As a landlord, your insurance policy extends coverage to the physical structure of the building or home you're renting out and any of the appliances or furnishings you own inside, like the fridge or stove. But your tenants' valuables will need to be covered by another, separate renters policy, as your policy won't extend coverage to damages affecting their personal property.

Renters insurance coverage offers tenants the transparent and customizable protection they desire for their personal property and any legal and medical disputes they could face. Oh, and did we mention how helpful ALE coverage is for both renters and landlords? Take a look at the standard protections offered by a renters insurance policy. 

• Personal Property Coverage - Personal Property coverage refers to all of the renter's belongings that fill up their place. Renters need to remember that personal property coverage will not pay to replace their roommate's stuff or any furnishings or appliances supplied by the landlord. But, if the renter's clothing, appliances and furniture, jewelry, or electronics get damaged or destroyed by a covered peril on their policy, personal property coverage will step in to replace the items lost. Covered hazards include fire, theft, and weather events.
  
• Liability Coverage - If someone gets hurt at the renter's pad in a freak accident, their personal liability coverage extends to the injured party's hospital bills or legal fees incurred from a lawsuit. Personal liability coverage also applies to certain damages that the tenant may cause by accident when they’re away from the rental home.
  
• Additional Living Expenses (ALE) - If disaster strikes at your rental property and it is deemed unlivable, your tenant will have to temporarily relocate while repairs are being made. ALE coverage will then step in to pay for a generous amount of their expenses incurred from being displaced (hotel stay, food, clothing, etc.). Because your tenant will have this life-saver coverage on their renters policy, you, as their landlord, won't feel guilty or responsible for having to pay for their transitory living expenses. Instead, you can turn your focus on repairing or rebuilding your rental thanks to your own insurance coverage stepping in. 
  
  

Undeniable Perks For Both Landlords And Tenants: Renters Insurance To The Rescue

Renters insurance can save both landlords and tenants from various potentially unpleasant conversations. As we hinted at above in the ALE breakdown, the perks of renters insurance reach to both parties involved in this equation. We can explain. 

Benefits Of Renters Insurance For Landlords:

1. Reduced Risk Of Conflict - If a covered peril, like a fire or other accident (through no fault of the tenant), causes damage to their personal property and they have no other recourse to cover the loss, they may demand that you pay for the damages. This kind of legal pursuit also commonly happens when a tenant experiences theft while they're away from the rental. While it's not up to your policy to cover their belongings, any legal actions can create mounting tension between you and your renter, which no one wants. When you require your tenants to have a renters insurance policy before move-in day, it undoubtedly gives you peace of mind knowing your tenants have a viable recourse to cover losses. 
2. Reduced Risk Of Pet Problems - If you allow pets, the tenant's liability coverage included in their renters insurance could extend coverage to a dog bite claim. However, it's a good idea for you to point out that the possible coverage will likely depend on the type of dog the insurance company restricts. Many companies won't extend liability to owners of certain dog breeds. If renters insurance is your sole reason for allowing pets on your property, you may want to be sure your tenant's policy covers pet liability for their specific dog.

 Benefits Of Renters Insurance For Tenants:

1. One Less Worry On Their Minds - There's a significant level of ease felt when you know the things you've worked hard for are protected from just about anything. Renters insurance delivers invaluable peace of mind, taking stress off the plates of tenants trying to navigate everyday life on top of caring for and inhabiting someone else's property. 

2. Reduced Liability Concerns - Accidents happen. We all know this. If someone were to get injured and the tenant is deemed liable, their liability insurance on their renters policy would save them from a world of threatening legal action and expensive fees. 

Class Is Now In Session: A Little Insurance Education Goes A Long Way

You've got a lot on your plate, so we don't expect you to teach an impromptu course of Renters Insurance 101 during every tenant interview you conduct. Luckily, we can do the educating for you. CFM offers and quick and convenient online solution to purchasing renters insurance and informing tenants on the ins and outs of coverage. When it's down to decision time, and you can only choose one occupant for your rental, wouldn't you be more inclined to pick a candidate with renters insurance as opposed to one without? 

If you'd rather have paper materials to physically disperse to your potential tenants that sway their opinion of just how helpful renters insurance could be, we've got you covered there too. Contact a local CFM agent in your zip code and request informational renters brochures and flyers to give your tenants, making it even easier for them to get a policy if you choose to make it a requirement in your approval process.

With Great Power Comes Great Responsibility: CFM Is Ready To Positively Influence Your Insurance Journey, One Useful Tip At A Time

For more helpful insight on how much coverage a renter may need, what is and isn't covered, and the most common myths debunked, click here.