You Might Be Forced To Buy Renters Insurance

You dotted the i's and crossed the t's on the rental application, wrote a check for first and last months' rent, provided character references and are all set to move in.

But wait - do you have renters insurance?

What used to be optional is now becoming a requirement for tenants at a growing number of apartment complexes.

In a 2012 survey of large apartment complex owners by the National Multi Housing Council in Washington, D.C., 84 percent said they required their tenants in at least some of their properties to have insurance, up from 62 percent in 2012.

"We started requiring renters insurance in 2007, and we were on the forefront of doing that," says Shanna Teague Berrien, director of insurance risk for CWS Apartment Homes in Austin, Texas, and a member of the National Apartment Association. "In the last three years, everybody who's anybody has made that a requirement."

Berrien says mom-and-pop landlords generally don't require renters insurance, but most big complexes do. Her company owns and manages 21,000 units in Texas, North Carolina, Atlanta, Denver and Folsom, Calif.

Renters insurance covers your personal belongings if they're stolen or damaged and provides liability protection if you cause someone else to suffer injuries or property damage. A landlord's insurance covers the structure and their own liability but not tenants' possessions or tenants' liability.

Renters insurance also pays for additional living expenses if your apartment or rental home is uninhabitable because of a covered disaster, such as a fire. The coverage kicks in if you have to live somewhere else and incur extra expenses while your apartment is being repaired.

Why landlords want you to have renters insurance

"A big reason we're seeing it grow is because it's just a good idea for all involved," says Jim Lapides, a spokesperson for the National Multi Housing Council. "For the renter, it can provide protection against catastrophic events. The building management's insurance will rarely cover the personal items of their residents."