As a landlord I am very picky about my tenants.  I check them out, and get to know them.  But one thing I didn’t push far enough was renters insurance.

It was in the lease that they signed, and they said they were getting it, but I didn’t push to see a policy or check that they did.  I warned them that I only covered the building, but I did make sure it was safe and came in every 6 months to check the panel, change batteries in smoke detectors and give the house a checkup.

As it turns out they felt their belongings were not worth that much and not worth insuring, but like many tenants and homeowners, your belongings are not the only thing you need to think about in a catastrophic event.Renters InsuranceCredit: Diane Palmer

I have owned a semi-detached 4 bedroom home in a small town for 3 years now.  My family and I literally updated it from top to bottom including new kitchen, plumbing, flooring and even the old green bathtub was ripped out and replaced.  There was not a corner we didn’t touch.

When it came time to rent it out, we had become very attached to it, so I use word of mouth and other methods for screening good tenants who will treat this house as their home and with respect.

I have had great tenants for the 3 years we have owned this house, and just recently I spent 5,000 more dollars on some extra upgrades to add more value to the property. 

My tenants mentioned that they would get renters insurance and I told them they can get good renters rates online  that I as the landlord, I have the building and the appliances (which I own and included in the rent) and a couple of sheds insured but not their contents.

They realized this, and I never mentioned it again, until one recent Saturday night while at a wedding I got a frantic call from my tenant that there had been “trouble” at the house.  There had been a fire.  My stomach did flip flops as the tenant put the fire chief on the phone and he explained that for an “undetermined” reason the metal shed beside the house burst into flames and then jumped to the side of the house (which was 7 feet away!) and also out the other side to burn the neighbours wooden fence.Why you Need Renters InsuranceCredit: Diane Palmer

We were in another city and I couldn’t get back that night.  The fire chief assured me that the fire was now out but that the utilities had been shut off so the tenants needed to find somewhere else.  So, after many frantic calls in the parking lot of the wedding reception to my insurance reporting line and to the tenants it was at least settled for that night, but that was a long night!

This is the number one reason why they should have tenant insurance or also known as renters insurance!  Accommodation!  Below are 5 reasons for getting this coverage:

1.  Emergency Accommodation! – If you have a tenant insurance policy all the tenants would have had to do is make a quick phone call and they would have been put up in a local hotel even given a taxi ride there and any emergency items they may need for that night, such as baby things, clothes and toiletries.    Instead they had to scramble to find friends and relatives to stay with that night.  They have children and a dog so this is not the easiest thing to do.

Luckily they were not home at the time either, as the fire did a lot of damage to the back bedroom and that was their baby’s room!

2.  Assess Their Belongings – If they had renters insurance the adjuster would have not only had them in a hotel but would have been there right away to assess the situation and see if any of their belongings could be cleaned or had to be replaced.

So, even if you think that couch you got from Aunt Bert was not worth much, they would have either had it cleaned or replaced.

3.  Renters Insurance Would Deal With Long Term Accommodation – As it turns out the damage to this house was substantial even though on first look it didn’t seem that way until a structural engineer was called in and wanted the kitchen ceiling ripped out and cabinets taken down to assess the wall behind only to find out there was damage to supporting floor beams, so this will be at least a 2 month repair.

So, it is one thing for relatives and friends to put you up for a couple of nights or so, but 2 months might be pushing it for many!  With a fire like this, they have the option to break their lease but they told me they have nowhere else to go and loved this place, so will have to camp around town and wait it out.  With a 16 month old baby and other kids this will not be easy.Renters Insurance and Why You Need ItCredit: Diane Palmer

4.  Move Your Belongings Out of The House – Since my tenants did not have renters insurance they have nowhere to store their things without paying out huge bucks.  They have come in and taken as many of their clothes and baby things they could and had them cleaned so they could use them.  (smoke damage can cause just as much problems as the actual burnt parts!).

The contractor that will be doing the repairs has been sympathetic to our tenants in that they are not demanding the house be emptied which they usually do.  The problem with this is they can come after me the landlord to remove everything!  Luckily the basement sustained minimal damage (water damage was restricted to the laundry room where there is no drywall or flooring and it is good) and so much of their bedroom furniture and living room things will have to go down there but who is going to move them? 

As the landlord you are responsible to make sure the area is clear for the contractor, but in this case they are being helpful and will assist in moving furniture off the second floor as all the flooring is getting replaced after the water damage.

5.  Storage – If they had renters insurance any items that could be cleaned and saved would be moved out, cleaned and then stored for the tenants until the day the house was finished and then they would move it all back in for them.

So, as you can see, getting tenant or renters insurance is not just to give you a few bucks for that old couch but to help you get on with life in a catastrophic incident.

This fire was not their fault, it was believed to be arson, but has not been proven so listed as “undetermined” but I know the tenants simply kept a few kids bicycles in that side shed nothing flammable and to have a fire burn that fast and that hot to burst out both ends and jump the 7 feet to the house and burn the neighbours fence in a neighbourhood where “everyone knows every move you make” you know something was thrown in there and lit.   This also happened in broad daylight about 5pm.

Why?  I guess we will never know, but in the meantime I am monitoring the rebuild but as much as I would like to help my tenants out, I have a large deductible I have to pay so I just can’t help them out with money.  I feel bad for them as they bounce around relative to relative and try to work as well, but when they move in I will want to see a renter’s policy.  I don’t think they will hesitate this time. 

Cheap renters insurance – You can get this type of insurance for under 30 dollars per month in many cases, you can also get renters rates online.  That 30 dollars a month seems like a good deal right now to them, plus it would save headaches as a landlord.

They have been helping to move their stuff into the basement because they can’t afford storage and they are having to pay to have it cleaned.  I will try and help them with that, but I can’t replace the baby furniture that was destroyed.  Their parents are helping out too, but it could have easily been all on me. 

Thankfully, no one was injured, that is something we all hold on to.  I have to stop myself from doing the “what if’s” like if they had been home and the baby in that room.

So, why should landlords require tenants to carry renters insurance?  The above 5 reasons should answer it all!