Should You Require Residents to Have Renters Insurance?
Requiring residents to carry renters insurance is one of the most valuable property management levers that you have at your disposal. Unfortunately, a recent Insurance Information Institute (III) poll indicates a major discrepancy in the number of homeowners that have insurance at 96 percent compared to an estimated 35 percent of tenants who had renters insurance in 2013.
Inform and Empower Residents by Encouraging Renters Insurance
We all know that most anything can occur anytime – so why is there so much tenant hesitancy to invest in renters insurance? The core of the quandary is likely lack of knowledge on behalf of the tenant, many of whom believe that the contents of their abode are covered by your property insurance policy, which, as property managers know, is not the case.
Here are the facts. Your owner’s policy covers the structure but not renters’ possessions and, if the unit becomes uninhabitable, you aren’t responsible to provide a accommodations. Another simple fact is that renters insurance is actually fairly inexpensive. Arm yourself with accurate and current info, so you know how to approach potential residents about the importance of protecting their interests with proper coverage.
The Cost of Losing Everything
Certainly, those precious keepsakes, photos, and mementos can never truly be replaced, but a little cash replacement value can go a long way when all of a tenant’s belongings are lost due to a fire, windstorm, or other unpredictable act of nature. Furnishings, bedding, and incidentals such as medications and clothing are replaceable through renters policies, but coverage limitations will depend on the policy type the tenant chooses. Print up this handy Renters Insurance Checklist from the III, and offer it to new and potential tenants during the application process, because the cost of losing everything is incalculable.
Dispelling the Myth that Renters Insurance is Expensive
Many tenants often don’t want the hassle of one more bill, but renters insurance can be had for less than $200 per year nationwide according to estimates from the National Association of Insurance Commissioners. Discounts are available for many reasons including renters combining multiple policies, having good credit, being a senior or active military, and for having a long-term relationship with an insurer.
As a property manager and owner, you can do your part to foster insurance discounts for yourself and your tenants by providing:
- Security Systems
- Smoke Detectors
- Deadbolt Locks
- Ample Exterior Lighting
- Property Security
Renters Insurance Benefits are Immediate Following a Disaster
Renters policies also provide displaced tenants with funds to cover temporary living arrangements and associated expenses. Today, most reliable insurers can make almost immediate arrangements to offer a stipend for a hotel or temporary housing arrangements for policyholders, which can be a huge burden on any family. Without renters insurance coverage, they may be out on the streets – something many people just don’t have the foresight to consider when opting out of renters insurance.
Don’t make renters insurance optional, – require your tenants to purchase coverage – or at least highly encourage them to do so.
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AppFolio, Inc. develops Property Management Software that helps businesses improve their workflow so they save time and make more money. Appfolio submits articles & blogs including topics of Resident Retention, Improved Owner Communication, Time Management, and more.
Tags: Insurance, Landlord Law, Property Management