Renter’s insurance is an often-overlooked expense that can be vital to residents. Many renters, especially younger residents, may be unaware of what renter’s insurance is and how it can help them in an emergency. As a property owner, you should encourage your residents to have renter’s insurance by educating them on the subject so they know what it’s for and how it can help them. Here's a look at the benefits of renter’s insurance for both property owners and residents.
What is Renter’s Insurance?
Renter’s insurance is an insurance policy that protects the belongings of a resident in the event of an unfortunate circumstance like a fire or burglary. Although you likely have property insurance for your building, that does not cover the personal belongings of the resident.
It’s important to let them know that without renter’s insurance they are vulnerable to unfortunate circumstances. That way they know that you won’t be able to reimburse them for any stolen items or other damage that occurs inside the unit.
You do have a responsibility to maintain a certain degree of security and safety within your building. But incidents do happen and as long as you’re upholding your end of the bargain, you can’t be held liable if something happens inside a particular unit. That’ why renter’s insurance is so important
What does Renter’s Insurance Cover?
Renter’s insurance typically includes three major areas of coverage:
- Personal liability coverage
- Personal property coverage
- Additional living expenses.
Personal liability protects the resident in the event he or she is found liable in court for an injury or damage to someone else’s property while on the premises. So, if a guest comes over, slips in the kitchen, and breaks a leg, renter’s insurance will help you pay the damages if the guest decides to sue.
The resident’s personal property will be covered in the event of a fire, burglary or other mishaps. This may be the most important point to stress to a resident. It can be difficult to explain to someone who just had their prized possessions stolen that you are not liable to reimburse them. But the facts of the matter are that a property owner is not responsible for protecting the belongings of uninsured residents – which is precisely why it’s important to let them know this from day one, so they are not surprised.
Finally, renter’s insurance can pay additional living expenses if a situation occurs that makes the unit unlivable. Say there is a fire or excessive damage caused by a burglar and the resident has to find alternative housing until the situation is remedied. Renter’s insurance can pay for the additional expenses – including housing, meals, and other related costs. These are extra expenses that no one plans for but can be a lifesaver in a time of crisis.
Benefits of Renter’s Insurance
It’s important to let your residents know that without renter’s insurance, their belongings are not protected from unfortunate circumstances that occur within the apartment. Here are some benefits you can stress to encourage them to purchase a policy.
The best part about renter’s insurance is that it’s quite affordable. It’s typically only about $15 - $20 per month or about $200 per year. Compared to the cost of replacing all of your belongings, that’s a nominal sum. Renter’s insurance is something many people think they can avoid, but when disaster strikes, they regret being so frugal. You can stress to your residents that the cost of a policy is nothing compared to the expenses they may be forced to pay in an emergency.
Even if you don’t think you own much, the electronics, clothing, and valuables most modern renters own can add up. If you have a TV, a laptop, a smartphone, and/or a tablet, a stereo system, valuable artwork, or any designer clothing in your closet, it can cost a lot to replace these things. If your apartment is burglarized or there is a fire and you’re not insured, you’ll have to replace everything out of pocket. A simple renters insurance policy can go a long way toward helping you rebuild your life after a potential disaster
Helps you out in an emergency
When someone breaks into your apartment or a fire destroys your unit, the last thing you want to think about is how you’re going to afford to get back on your feet. These kinds of situations can be quite destabilizing, especially to younger residents and it’s important to have some protections in place in the event of an emergency.
Many residents naively think it won’t happen to them until it does. Explain to residents that having renter’s insurance guarantees that if the worst happens, they’ll be protected.
Whether you're a first-time property owner or an experienced property manager, it's important to let resident's know about renter's insurance.