The Renters Insurance Dilemma

 
 

The Renters Insurance Dilemma

RentersInsurance Many owners want the tenant to obtain “renters insurance”.  This type of insurance will generally insure two areas: the tenant’s personal property if it is stolen or destroyed, and provides liability insurance.  Liability coverage protects a tenant if they are found legally responsible for injuries to other people or damage to the property.  It may also cover for additional living expenses such as hotel bills and food should a tenant be unable to live in the property.

Many landlords require renter’s insurance as a condition of occupancy, and a few have tried to evict tenants who did not maintain the insurance.  Two recent court cases have put this practice in jeopardy.

  • A Los Angeles threw out a case against a tenant who refused to pay for renter’s insurance because “he had nothing of value to insure”. The court agreed that is was onerous to pay for insurance when there was nothing of value to insure.
  • Another Los Angeles court (Boston LLC v. Juarez) ruled recently that a tenant’s failure to obtain renter’s insurance does not constitute a material breach of covenant upon which an eviction may be based. In other words, if a tenant cancels their policy, you can’t evict them for that reason.

You can ask for it, but you can’t do anything if they don’t pay for it.