Immediately below are two clauses in our residential lease. Most leases, virtually all, have similar language. Yet, a staggering percentage of renters, 55% to 60%, aren't covered with renter's insurance policies.

Liability: Landlord is not responsible for loss, expense or damage to any person or property unless it is due to the landlord's negligence. Tenant must pay for any damages suffered and money spent by landlord, relating to any claim arising from any act of neglect by tenant. Tenant is responsible for all acts of tenant's family, employer, agents, guests, and invitees.

Insurance: Tenant shall carry a renter's insurance policy with liability coverage to the extent of $300,000 to protect landlords interest as it appears.

Value of Personal Property

Why aren’t more renters compelled to protect themselves?  It cannot be cost related; typical premiums range $12 to $15 per month.  Most renters undervalue their personal property.  Furniture, electronics, appliances and clothing all have considerable value, especially if they have to be replaced because of a loss.  It’s estimated the average renter needs about $30,000 in personal property replacement coverage. Maybe it’s simply a lack of awareness the policies are inexpensive relative to the protection they afford.

Important note:  A landlord isn’t responsible for a tenant’s entertainment system ruined when a new roof leak presents itself by dumping gallons of water on a Plasma TV, DVR, and Blu-ray.  Suddenly, $15/mo. is pretty cheap.

Tenant Liability

Another aspect often overlooked, is a tenant has significant liability for common occurrences; tenant actions that result in a loss, personal or property.  For example a fire caused by negligence (unattended candle, stovetop burner left on, etc.) is likely to become a financial liability far beyond the average savings account balance.  Repairs and restoration from minor fires are rarely less than $2,500.  Larger scale fires can easily exceed $100,000.  Renter’s insurance policies offer real financial protection for the tenant.

Regardless whether or not a landlord requires or doesn’t enforce renter’s insurance requirements, for the cost of 5 gallons of gasoline, your protection is mandatory and should not be dismissed.