Many lease agreements for renters merely suggest their tenants procure renter’s insurance when they move into a new apartment or condo. For management’s sake, this suggestion should be made into a requirement for all renters. This might seem a bit harsh or strict, but it actually makes a lot of sense. Here’s why:
It’s Not Expensive
First and foremost, renter’s insurance is surprisingly affordable. The argument that it is too expensive is weak. For just a couple hundred dollars a year, a renter gets the peace of mind that comes with knowing that their belongings are protected. A typical policy priced as low as $150 – $200 annually can cover something like $15,000 in property damage and $100,000 for liability coverage! Some people might even have renter’s insurance included in their auto coverage without knowing it. If not, encourage tenants to do so by informing them that they may get a discount for bundling the extra coverage onto their existing policy. As leasing property manager, you can also work out a corporate program with an insurance company where the residents in your building get a special discount for getting renter’s insurance with them. In short, incentivisation is a great persuader.
It will Reduce Late Payments and/or Evictions
If a renter is uninsured and valuable items are damaged, it might hinder their ability to pay rent on time which affects your bottom line. What’s worse, let’s say your tenant works from home and a flood or fire destroys the equipment they use for work. The damages may adversely affect their livelihood long term. If they can’t pay rent at all, you, as the leasing property manager, may be forced to begin the eviction process. Needless to say, the legal fees, back rent and headaches make evictions a costly and dreaded endeavor. Don’t let this happen to you. Make renter’s insurance mandatory.
Helps Condo Associations Too
It is quite common that condo owners rent out their units to generate income or sublet their condos while they travel. If a disaster occurs when the owner is renting out his/her condo, their property insurance will not cover the renter’s possessions. This leaves the tenant unprotected and likely to point fingers and come after the owner or association for compensation. For obvious reasons, reducing the amount of angry tenants in the management office is always a priority. How can you, as the leasing property manager, do this so you can focus your energy on running things? Make proof of renter’s insurance apart of the application process when owners screen any prospective tenants. If there ever is a loss, the insured tenant would simply file a claim with their own insurance and live happily ever after. It would reduce foreseeable tensions between management, unit owners and their tenant or sublessor.
Mandating your tenants to carry renter’s insurance is really a win-win situation; it’s a low cost solution that eliminates headaches. Leasing property managers should establish policies that makes all the moving parts run smoothly. Requiring renter’s insurance, whether you’re a leasing property or an association, can make a significant difference should an emergency occur.