The amount of coverage you require from a renters' insurance policy is up to you, but be sure to discuss this with your lawyer as well. We recommend that you check your state and local laws before adding a clause requiring renter's insurance to your lease. When an applicant agrees to a renter's insurance requirement, it usually shows that he or she is compliant and is likely to be a good tenant. You can obtain renters' flood coverage from the National Flood Insurance Program or from a private insurer and add earthquake coverage as a separate endorsement or policy.
If renters insurance is the sole basis for allowing pets, you may want to make sure that your renters' policies cover pet liability. Some landlords may request that they be named as additional insureds along with the property manager. By requiring a tenants' policy, you reduce the need for the tenant to seek indemnification for his or her losses from the landlord. But because laws vary by state, be sure to talk to a lawyer about adding a mandatory renters' insurance policy to your lease.
If you have a certain breed of dog, you may want to get a personal liability policy in addition to your renters insurance plan. With Zillow's Rental Manager, you can use a customisable online rental agreement template and specify whether renters insurance is mandatory and how much coverage the renter needs. It allows them to recover damages If they inadvertently cause a fire in their unit or water damage by leaving the bathtub running, their landlord's insurance will pay for the damage to the building, but only after the landlord pays the excess. Therefore, if a situation arises where a tenant cannot afford the additional cost or is not interested in purchasing a renter's insurance policy, it may be in the tenant's best interest to continue looking for another applicant.
Although renter's insurance is not necessarily mandatory (depending on your state's laws), it is a good idea to make it a requirement for renting your property. If renters' insurance is a mandatory part of the lease, cancellation of the policy by the tenant or its lapse is grounds for termination. Landlords can require tenants to have renters' insurance in the lease only if they require it for all of their tenants.