A new 2025 report from RentRedi and BiggerPockets finds that smaller landlords—those managing one to four units—are 60% more likely to require renters insurance from their tenants than larger property owners.
The survey also revealed that while most landlords understand the difference between renters insurance and landlord insurance, many still stop short of enforcing or verifying it. That’s a missed opportunity to reduce liability, protect property, and attract more reliable tenants.
As property management continues to evolve, smart landlords are viewing renters insurance as more than a formality—it’s becoming a cornerstone of good risk management. Here’s why more real estate investors and independent landlords are making it a standard lease requirement.
1. Renters Insurance Reduces Landlord Risk
Your landlord insurance protects your property—the structure, fixtures, and any landlord-owned contents—but it doesn’t cover your tenants’ belongings. If a fire, flood, or theft occurs, uninsured tenants often look to the landlord for compensation.
By requiring renters insurance, you’re clearly defining responsibility and reducing potential legal disputes. Renters policies cover personal belongings, which helps keep blame—and lawsuits—off your shoulders.
2. It Limits Legal Liability in Case of Damage
If damage occurs across multiple units (for example, a kitchen fire that spreads), uninsured tenants may attempt to hold the landlord accountable for their losses. When every tenant is insured, those claims go through their renters policies, not yours.
It’s a simple, low-cost way to reduce your exposure to lawsuits that fall outside your coverage.
3. Renters Insurance Adds a Layer of Liability Protection
Accidents happen—and when they do, liability coverage in a tenant’s policy can make a world of difference. If a visitor is injured inside a tenant’s unit, that claim typically goes through the renter’s policy, not the landlord’s.
This helps prevent claims from being directed toward you or your commercial insurance, keeping premiums and risk lower over time.
4. It Covers Tenant Relocation—Not You
In some jurisdictions, landlords are responsible for tenant relocation if a property becomes temporarily uninhabitable. Renters insurance can offset or fully cover those costs through its loss-of-use coverage, which helps tenants pay for temporary housing, meals, and living expenses after a covered loss.
That means less disruption for your tenants—and fewer unexpected expenses for you.
5. It Supports Pet-Friendly Leasing
More tenants are looking for pet-friendly housing, but that can mean more risk. Many renters insurance policies include pet liability coverage, helping protect both you and the tenant in case of an incident involving a pet.
Requiring insurance can make it easier to allow pets on your property, attracting a wider pool of responsible renters without increasing your exposure.
6. Renters Insurance Can Help You Screen for Reliable Tenants
Landlords increasingly see renters insurance as a sign of tenant reliability. Tenants who are willing to secure coverage tend to be more financially responsible and invested in maintaining a safe, stable home environment.
Adding an insurance requirement can be an effective—yet non-invasive—way to help identify conscientious tenants during the screening process.
A Smart Addition to Every Lease
Renters insurance isn’t just about protecting your tenants—it’s about protecting your investment. By making it a standard lease requirement, you’re reinforcing accountability, reducing liability, and creating a smoother, more predictable rental experience for everyone involved.
Whether you manage a single-family home or a small portfolio of multi-unit properties, requiring and verifying renters insurance is one of the simplest ways to safeguard your business and attract quality tenants.
About ZipReports
ZipReports provides fast, FCRA-compliant tenant screening and background checks for landlords and property managers. Our comprehensive reports help you make informed, confident leasing decisions—while keeping your properties and tenants protected.
