Renters Insurance not only protects a renter and their personal belongings, it also helps protect a property owner in the event of an unforeseen circumstance throughout a lease term.
Here are a few reasons why requiring renters insurance should be a standard part of your leasing process from our professionals at our Property Management Company in Central Florida.
Peace of Mind
Natural Disasters and theft are two of the biggest unpredictable threats to loss of personal belongings. Requiring Renters Insurance will offer peace of mind that your tenants will be compensated in the event of these or other threats leading to the loss of their belongings.
It will also ensure they won't need to seek you as a resource to help replace any of their loss.
“Homeowners are only required to insure the structure and all tenant's personal property is at risk when there is a flood or fire. Renter's Insurance is a low cost way for them to protect their personal property in case of an accident.” - Diane Schlosser, Professional Property Manager in Central Florida
Requiring Renters Insurance will also offer you peace of mind that your tenants will have temporary housing, dependent on their coverage, in the event of a natural disaster or accident deeming your property unlivable.
Taking these steps to avoiding a possible claim against you will help ensure your long-term ROI as a property owner.
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Legal Reasons
Protecting yourself from legal responsibility goes beyond the possibility of having to replace a tenant’s personal belongings.
“Accidents happen - what if an accident happened at the house you are renting? Who is potentially responsible for those medical expenses? Depending on the circumstances, the Tenant, Landlord and/or Property Management Company could be at risk!” Stephanie Frederick, Professional Property Manager in Central Florida.
For example, if your tenant hosts an event and one of their guests are injured while at the property you own, you could be liable for their medical expenses. Your insurance policy may cover the costs, but that could result in an increase in your premium.
“Most of the public does not understand the importance of Renters Insurance, especially when the tenant has dogs, even if the dogs are not on an 'aggressive breed.' Many homeowner's insurance plans do not have that coverage unless it is asked for. This creates an issue in the case someone gets harmed due to the dog. Most tenants insurance today has a clause that covers not only the tenant's pet, but visitor's pets as well.” Susanne Hawkins, Professional Property Manager in Central Florida.
Requiring that your tenants purchase coverage helps you alleviate potential legal circumstances before they arise.
Keeping the Relationship Favorable
A positive relationship between tenant and property owner/manager is an important part of the leasing process. Peace of mind that all will be taken care of in the event of any unforeseen circumstance, and having a third-party take care of the details if such an event should occur will help keep that relationship favorable.
Also, your tenant may not be aware that their valuables aren’t covered by their landlord’s insurance policy. Requiring their own coverage as part of the lease policy sets the stage of expectation from the beginning. It makes them aware what you are and are not responsible for, and allows them to properly protect themselves.
“Homeowners Insurance protects the owner and the property they own, period. My friend learned the hard way. She rented a home for over 20 years without incidence. She rented directly from the owner. There was no Property Management Company involved to offer/require the importance of Renter's Insurance. Then, the house was broken into. Everything from jewelry to computers and televisions were all gone. Had the awareness of Renters Insurance been known, and at such a low cost, could have at the minimum given her peace of mind after such a devastating invasion into her home.” Debbie Gordon, Property Manager Assistant.
Helping with the Tenant Selection Process
Requiring Renters Insurance as a standard part of your lease term is a helpful way to find the right tenant for your property. Many policies for renters are fairly affordable, so potential tenants who object to purchasing insurance may not be the right fit for your property.
Applicants who are willing and able to take the extra steps to protect themselves and their belongings are likely to make responsible tenants.
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Ensuring the Details
Insurance policies vary depending on provider, coverage amount, and what each specific property owner’s needs may be. There are also different coverage options for renters insurance, and it may be difficult to determine what kind of policy you should require of your tenants.
"Each person needs to check with their insurance company to see if the coverage is available and what the specific clauses are. Also, consider as an owner how much coverage you would like a tenant to require.” Susanne Hawkins, Professional Property Manager in Central Florida.
Using a professional Property Manager can help ensure you are properly covered from your property to your tenant and any potential circumstances that may arise.
Additionally, a Property Manager can take the steps to periodically ensure your tenant has maintained their Renters Insurance policy rather than providing proof of coverage at move-in, then immediately canceling their policy.
Interested in having a property management company handle your leasing process?View our full brochure to learn about our property management solutions or request a consultation with a member of our Property Management team.
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*Each insurance carrier and policy may vary in coverage. Please speak with your insurance provider or consult a Property Manager for help finding an insurance specialist.
