Should You Require Renter's Insurance? What Landlords Need to Know

Introduction 

As the number of renters in the U.S. continues to grow, so does the number of renters with renter's insurance. In 2014, only about 36% of renters had purchased renter's insurance, but by 2024, that number had jumped up 20% to over 55% of renters having renter's insurance. 

Some renters may choose to buy their own renter's insurance while living in your unit, but can you require them to purchase it as part of the lease, and if so, should you make it a requirement? We’re here to help you learn about the basics of renter's insurance and if you can require it so you and your tenants can stay protected. 

The Basics of Renter’s Insurance 

Landlords have their own property insurance that covers the building their tenants live in in the rare case of structural issues or liability issues. While your responsibility is to cover the unit, with renter's insurance your tenant’s responsibility is to cover what’s inside the unit. 

Renter's insurance usually covers personal belongings, personal liability, and additional living expenses (more on this later). In the case of a myriad of perils, your tenants will be reimbursed for their items and will be able to afford a temporary place to stay while damages are fixed.  

Renter's insurance is popular not only for its protections, but because of how inexpensive and accessible it is. According to NerdWallet, the average cost of renter's insurance in 2026 is $14 a month or $165 per year—for the price of a couple coffees a month, tenants can protect every item in their home, making it an easy choice for both renters and landlords. 

Why Do Landlords Require Renter's insurance? 

So, can a landlord require renter's insurance for their tenants? If so, why do landlords require renter's insurance and how? 

Landlords can definitely require renter's insurance. There is no federal requirement or mandate for tenants, but landlords across the country have the ability to require renter's insurance for the duration of a lease.  

To make it a requirement, landlords must include it in the lease along with what kind of coverage is needed. Before move-in starts and keys are handed over, landlords typically ask renters for proof of coverage. Once a tenant sends over the required documents, they’re set to move into your unit with the coverage they need. 

Why do landlords require renter's insurance for their tenants if the coverage only affects their belongings and liability? There are several reasons a landlord would want to make renter's insurance a requirement in their properties, and it all comes down to peace of mind. 

1. Fewer Disputes: Tenants with renter's insurance are less likely to have disputes with their landlords about reimbursement for damages to their personal property because they already have coverage for those items, meaning you’ll have fewer disagreements with your tenants and dodge potential lawsuits.  

2. Protection Against Loss of Use: Renter's insurance also provides additional living expense coverage for tenants, so if a disaster happened in the unit and they had to use their insurance to cover the cost of damages, they’d still be able to pay their rent after the loss because the expense isn’t out of pocket. 

3. Reduce Claims On Your Own Insurance: Finally, renter's insurance simply ensures that you won’t have to pay for damages with your own policy. Damages that may otherwise fall to you to fix or pay for are now covered by a tenant, meaning you don’t have to pay your policy’s deductible and have the damages in your policy’s history. 

What Does Renter's insurance Cover? 

As you’re learning more about what renter's insurance is, it’s important to ask: What does renter's insurance cover? There are three major categories that renter's insurance covers for your tenants, each serving a different purpose: Personal property, personal liability, and additional living expenses. Let’s break down each one to understand what exactly your tenants are purchasing. 

Personal Property 

Personal property coverage is what most people think of when they hear the term renter's insurance. It covers all of a tenants’ personal belongings in the rental unit if damages were to ruin them and they had to be replaced. Tenants may not think they have that much “stuff” in their apartment, but costs add up quickly when repurchasing everything, so having a good coverage amount can make a big difference in the event of a disaster. 

Typically, the perils included for coverage are fire, theft, vandalism, plumbing, electrical issues, and natural disasters (notably, earthquakes and floods are not included in this coverage and must be purchased separately). 

Personal Liability 

Personal liability can be an extremely important aspect of renter's insurance in the event that injuries or damages happen to someone on your unit property due to your tenant, their family, or their pets.  

If a visitor were to get hit in the head by a light falling from the ceiling, for example, personal liability coverage would cover the expenses of a court case for your tenant. Liability coverage often falls between the range of $100,000 to $300,000. 

Additional Living Expenses 

Additional living expenses (ALE) work in tandem with personal belonging coverage. Let’s say that a fire runs through the apartment and it’s uninhabitable while repairs are being done. ALE coverage allows those tenants to cover hotel or temporary housing costs, restaurant costs, etc. so their unexpected circumstances are taken care of while they are unable to live in their home. 

Should You Require Renter's insurance for Your Tenants? 

Renter's insurance isn’t a legal requirement for your tenants. If you feel strongly about not requiring the extra payment each month for your tenants, you are under no obligation to; however, a renter's insurance policy requirement can only have benefits for your units. 

A policy for your tenants can offer peace of mind for both them and you, so it should at least be a consideration for your rental business. More protection can never come with a downside—and it comes at no cost to you! 

Conclusion 

Renter's insurance is common for a reason—it’s a good investment for tenants and an easy way to give everyone peace of mind in a rental. With this new knowledge of the basics of renter's insurance, you’ll be well-equipped to decide whether it’s a good requirement for tenants in your rental business. 

FAQs 

Can a landlord legally require renter's insurance? 

Yes. Landlords can require tenants to carry renter's insurance as a condition of their lease. The requirement and minimum coverage amounts should be clearly outlined in the lease agreement. 

Does a landlord's insurance cover a tenant's personal belongings? 

No, this is a common misconception. A landlord's property insurance generally covers the building itself, not a tenant's furniture, electronics, clothing, or other personal belongings. Tenants need renter's insurance to protect their possessions. 

Does renter's insurance cover damage caused by natural disasters? 

Some natural disasters may be covered, but coverage varies by policy. Floods and earthquakes are typically excluded from standard renter's insurance and may require separate coverage. 

How much does renter's insurance cost? 

Renter's insurance is relatively affordable, averaging approximately $14 per month, or $165 per year, according to the article. 

When should landlords ask tenants for proof of renter's insurance? 

Landlords typically request proof of coverage before move-in and handing over the keys. They may also require tenants to provide updated proof when renewing their policies. 

Is requiring renter's insurance worth it for landlords? 

Definitely, yes. Requiring renter's insurance can reduce disputes over damaged personal belongings, provide liability protection for tenants, and offer greater peace of mind for everyone involved.