Escalating Rental Market Calls for Innovative Coverage

By John Mark Tichar

More than 34% of Americans rent their homes, which is the highest rate since 1965, according to a 2025 report by the U.S. Census Bureau.

While this is great news for landlords who often find more tenant candidates than available units, it also increases the risk in tenant liabilities. Oswald understands the risks faced by middle market and large market landlords and management companies, especially in these high-demand times.

Traditional renter’s insurance limitations

Enforcing and managing traditional renter’s insurance requires dedicated time and specialized oversight. It further becomes a management burden for larger portfolios when tenant turnover is factored in. This is a reactionary position in which landlords may find themselves.

Sometimes landlords are successful in getting the tenant to procure and obtain insurance for the first year or two but fail to consistently (and easily) track it. We have seen instances in which a tenant produces an insurance policy as required at the time the apartment unit is leased but cancels the policy two days later. Or the tenant may simply let the policy lapse. In large rental complexes, these instances can easily fall through the reporting cracks. Either way, the coverage is no longer in effect and unprotected loss can occur.

Traditionally, typical insurance requirements within a standard residential lease include $100,000 of liability along with coverage for their personal property. In theory, landlords view the liability limit as if they have rights to this coverage to protect them from tenant-incurred liability. While this is the intent, the reality of how coverage may respond can differ depending on scope of claim, leaving landlords with a much different outcome.

As a result, these limitations present landlords with a few challenges:

• For the tenant policy to respond to a claim, the damage must first be proven beyond a reasonable doubt to have been caused by the tenant.
• The first named insured on the renter’s policy is the tenant, not the landlord. This can present challenges because the insurance company essentially creates a conflict of interest between the landlord and tenant. The insurer will do everything it can to create doubt so it doesn’t have to pay the claim.
• For example, a grease fire or an overflow of water, which causes damage to the tenant’s unit, along with five other adjacent units and the building as a whole. Dividing the $100,000 coverage among the claimants doesn’t go very far and does not meet initial coverage expectations of the landlord.

Lessening the burden and covering the risk

Through technological advances, addressing and efficiently
managing tenant liability is easier than ever.

Oswald has a leading-edge program to address the shortcomings that adversely
impact landlords. Known as Tenant Liability Insurance, the program is gaining national traction
for several reasons.

• The policy can be offered as stand-alone or in addition to traditional renters’ insurance. Renters
  wishing to have full coverage can have both. Those who do not find value in carrying traditional
  renters’ insurance can still satisfy the insurance requirement with Tenant Liability Insurance.
• The renter can be automatically enrolled in the program at the time the lease is signed.
  Online enrollment takes literally five seconds.
• The landlord is named insurer (rather than the tenant). In the case of the earlier grease fire
  example, the landlord would be paid first. Any leftover claims funds can be distributed by the
  landlord to offset damage caused to tenants.
• The program is customizable to a rental community. All units in a community have the same
  coverage amounts, set by the landlord.
• The goal is to offer the coverage at no cost to the landlord.
• Tenants benefit because they don’t have to pay a full year of premium. Premium payments
  are made on installments, and the per-month cost to the tenant is significantly below
  traditional sources of renter’s coverage.

The cost of landlord coverage 

In addition to insurance carried by renters, landlords carry separate policies to protect their interests. These coverages can close the financial gaps left by renters’ insurance. However, the policies can include high premiums and deductibles. When tenants do not carry insurance, or their coverage does not address specific basic perils, landlords will be left with assuming these claims on their policies or their own reserves. These claims can prove very costly, with lasting financial impact to the landlord. The compounded impact of paying out-of-pocket to cover deductibles, in addition to having their policies at risk of increased cost due to claim frequency, is not a favorable position.

Landlord rewards

In addition to landlord-first coverage, tenant liability insurance offers landlords the opportunity to create an alternative income stream from their existing portfolio.

As an example, an owner with 10,000 units enrolls 80% of the complex’s tenants. These 8,000 insureds pay a monthly premium to the landlord. The monthly premium includes a premium to the insurance company and an administrative fee, paid to the owner.

Oswald will work with the insurance company to provide profit sharing opportunities for the owner based on profitability and volume. We make it easy with our proven onboarding program. Training, scripting and staggered implementation guarantees that integrate Tenants Liability Insurance into your communities can enable more control, better coverage and a money-making opportunity.

This article originally posted in 2019 and was updated in 2025.

CLICK HERE to learn more about Oswald’s Real Estate Risk Solutions.

For more information, contact:
John Mark Tichar
Vice President
216.367.8787
jtichar@oswaldcompanies.com