Apartment in Santa Barbara, CA
As the owner of an apartment building, you can offer housing to individuals and families on a short-term or temporary basis, potentially providing a valuable resource for your community. Furthermore, renting out homes to tenants can be a lucrative and rewarding business venture. However, you’ve also invested significant capital into your apartment complex and must secure your own interests. While landlord insurance can help with these matters, you may also consider additional precautions. 
What Is Renters Insurance?
Renter’s insurance is not to be mistaken for rental property insurance, also known as landlord insurance. Renter’s insurance refers to a type of policy your tenants might purchase to cover their own assets and interests. While your insurance can typically cover your apartment building’s structural elements and common areas, it does not typically offer aid for losses involving residents’ personal property. As such, you may wish to consider requiring tenants to carry renters insurance.
Why Would an Apartment Building Require Renters Insurance?
Landlords should consider their financial security and reputation when assessing every aspect of owning and operating a rental property. Although renters insurance is not required by law, landlords may institute their own mandates. Doing so can garner potentially valuable benefits, including financial protection from the following:
- Tenant liabilities—Your landlord insurance likely includes liability coverage for incidents in which you’re at fault, while renters insurance can help pay for losses caused by tenants. However, if renters do not have liability coverage, guests and other third parties may try to blame you, potentially causing financial hardship and inconvenience, even if you’re eventually absolved.
- Lawsuits—By requiring residents to carry their own insurance, you may limit your risk of them attempting to sue you for incidents in which the contents of their units are damaged. For example, an uninsured tenant may be more likely to pursue legal action following a kitchen fire, even if they were responsible for causing the incident and subsequent losses.
- High premiums—Insurance carriers consider many factors when calculating your landlord insurance rates. You may be quoted higher costs if you’ve had to file claims in recent years. However, tenants’ renters insurance may provide an alternative means to recoup losses, such as those arising from damage within units. As such, you may enjoy savings down the road.
We’re Here to Help
Contact Holmes & Holmes Insurance Agency, Inc. today to learn more about landlord insurance, renters coverage and other policies relevant to owning and operating an apartment building.