Is Renter’s Insurance Required in Virginia?


At Wakefield Law, we have been representing landlords of all kinds for over thirty years. In that time, we get a lot of questions about the details of drafting a good lease and protecting a property from possible damage caused by tenants. In a previous blog post, we wrote extensively on what to do if a tenant damages your property. But, from the very beginning, is there more you can be doing to look out for your real estate? Should you be requiring your tenants to obtain renter’s insurance? Is renter’s insurance even worth it? Let’s dive in. 

Renter’s Insurance Under the Virginia Residential Landlord Tenant Act

Under current law, a landlord is allowed to require that a tenant obtain renter’s insurance in the lease. However, a new law going into effect early next week takes this permissive approach and goes a step further. As of July 1, 2019, the Virginia Residential and Landlord Tenant Act (VRLTA) will require a landlord, if a lease does not specifically state that the tenant should obtain renter’s insurance, to provide written notice to the tenant.

So, what does this legislative change mean for you, Landlord? Basically, two things:

1. If you are not going to require your tenants to obtain renter’s insurance in the lease, then you should provide written notice to the tenant that states the following

●     You (the landlord) are not responsible for the tenant’s personal property

●     Your insurance policy (in your name, or in the name of your business) does not cover the tenant’s personal property

●     The tenant, while not required to obtain renter’s insurance under the lease, should do so if he or she wants personal property protected

2. If you have multiple rental properties, or the idea of sending this written notice is too burdensome to you, then you should instead just include the renter’s insurance requirement in your standard lease. This avoids the need for the written notice and complies with the VRLTA.

Enforcing the Requirement that a Tenant Obtain Their Own Renter’s Insurance

Many landlords do, in fact, choose to require that a tenant obtain their own renter’s insurance in the lease. However, once the lease is signed and the tenant has moved in, is there any way for you to follow up and ensure that the tenant did, in fact, obtain that insurance? Yes! In the VRTLA, the tenant is required to submit to the landlord written proof of their coverage. They are also required to maintain that coverage throughout the entire lease term. 

Buying Renter’s Insurance on Your Tenant’s Behalf

If leaving whether a tenant obtains renter’s insurance up to them makes you feel a little nervous, you may be wondering if there is a way to be more directly involved. The answer is yes. Under the VRLTA, a landlord may obtain renter’s insurance on the tenant’s behalf and require the tenant to pay the cost of premiums. This shouldn’t be considered a part of the security deposit -- it actually is closer to how utilities would be handled. You can require that the tenant either pay a monthly additional fee on top of their rent to cover the insurance premium, or you can require that the tenant pay the premiums up front, alongside the security deposit. However, it is important to note here that the amount paid up front (including both the security deposit and the insurance premium) cannot exceed the amount of two months’ rent. 

Choosing Whether to Require Renter’s Insurance

Ok, so now that you are fully up to date on what the law says, what should you do? In practical terms, why should you require renter’s insurance and go to all the trouble to confirm that it is in place throughout the entire lease term? There are actually a number of reasons why this is worth the time:

●     By adding a single line in your lease agreement, you protect yourself from potential litigation in the case of loss. If a tenant’s personal property is damaged through an accident or problem with the home, he or she may turn to you, as landlord, and expect compensation. While a lawsuit for the cost of damaged property may not be successful, that won’t stop the tenant from trying. An explicit statement in the lease (or better yet, actual renter’s insurance in place!) can avoid litigation altogether and provide the tenant a better avenue of recourse. 

●     If the worst should occur (like fire or flood), and the tenant needs to temporarily relocate from the premises, their renter’s insurance should take care of that. This is good news for you because, as the landlord, you will be dealing with mitigating your property damage and will be too busy to negotiate the terms of a relocation with the tenant during repairs. 

●     Requiring renter’s insurance may actually help pre-select responsible tenants. If the requirement for renter’s insurance is too much of a burden for a potential tenant (either financially or logistically), they may not be the right tenant for you. The cost of renter’s insurance is relatively low (usually less than $20 a month) and can be added on to existing auto insurance. If a potential tenant has a problem with obtaining renter’s insurance before moving into your property, it might be a good sign to keep looking. 

Thinking about Rewriting Your Lease?

At the end of the day, what you choose to do with your lease and your tenants is totally up to you. However, if you are looking for help reviewing and updating your lease agreement to bring it into compliance with current law and to best protect your real estate, Wakefield Law is here for you. We can review your current lease, give suggestions about how it can be strengthened, and draft a new lease, if required. If you do run into trouble with a tenant down the road, not only will you have a strong lease in your arsenal, you will also have an experienced attorney on your team. Give our office a call at 703-771-9740 to set up an appointment.