Whether you self manage or have a property management company manage your properties, your main goals are to make money and protect the asset. Tenants are the biggest risk when it comes to protecting your asset, which is why it is so critical to make your tenants carry renters insurance. Renters insurance will protect a tenants belongings but the most critical aspect of renters insurance for owners is the liability and medical portion of the policy.
If a tenant causes a fire and burns down the property then your property policy will probably pay but what then? Does your policy get cancelled? Do your rates go through the roof? Can you get insurance on another property you are buying? All these things can happen. Hopefully they haven’t happened to you but if it has then you know exactly what I am talking about. Here are a couple of things you might not know. Most property insurance policies exclude dog bites which causes the injured party to sue you. It happens all the time. A guest of the tenant gets hurt while on the property. Do they expect you to pay? The answer is yes. All property owners should have some type of renters insurance. If you don’t, you have a big gap in protecting your asset and you are one dog bite away from a lawsuit.
“All property owners should have some type of renters insurance. If you don’t, you have a big gap in protecting your asset and you are one dog bite away from a lawsuit.”
Below are a few key points related to renters insurance that benefit owners:
- Renters Insurance has contents coverage for the tenant so if something happens to their contents because of a malfunction of the property then they will be covered instead of calling you to pay.
- Liability insurance will pay up to $100,000 (common limits) for damage caused by the tenant. Medical payments coverage will pay for medical damages to others when they are hurt on the premises, usually up to $5,000.
Property management companies and self-managers have a difficult time executing this vital requirement because:
- They want to lease the property and are concerned that a potential lessee will go somewhere else if they have to get renters insurance
- They do not want to lose a tenant because they have to evict them for not being compliant
- They do not want to take the time to call the tenant if the policy cancels
- Taking the time to file and manage the tenants policies
Renters Place has a solution. We make all of our tenants carry renters insurance but we do it on our side. That’s right, we have a Master tenants policy so all of tenants have renters insurance and we bill them through their rent. We do not have to worry about it cancelling or someone’s policy falling through the cracks. We have minimum limits for the tenants so if they want more coverage than they can get an additional policy on top of what we already have. Our main concern is to our owners and the protection of their asset.
