Do You Require Your Tenants to Have Renters Insurance?
If you have been considering a tenant renters’ insurance requirement, here’s what you need to know:
Many landlords require tenants to have renters insurance so they can protect tenants – and themselves. According to Lucas Hall, landlord and founder of landlordology.com, having renters insurance mitigates the threat of lawsuits, reduces your liability, weeds out otherwise unqualified tenants (those not willing to pay around $20 a month may not be the tenants who pay rent and bills on time), may cover your deductible, and gives you peace of mind.
Experts peg the percentage of people having renters insurance to somewhere between 35-41%. More than half (56%) of younger renters from ages 23-35 do not have renters insurance. The reason? There may be a few:
- They don’t think it’s worth it, believing their items are not worth enough to pay for it.
- A lot of tenants think the building insurance will cover them in the event of a natural disaster or a break-in.
- Some also believe that if a roommate has renters insurance they don’t need it.
Great! You’re already ahead of the game.
That said, there isn’t a lot of guidance out there for landlords about how to keep up with renters insurance policies as policies expire and roommates move in or out. Probably because it would be such a manual process to record the expiration date of each policy and then reach out to the tenant to get a new one – and there’s no way all the expiration dates line up!
As property management best practice experts, we think the best route is always the proactive one: make sure your tenants are staying up to date on their policies. Technology can remove the manual aspects of this process by storing each policy and sending you an email or calendar alert when something is coming due – then you can shoot the tenant a quick email to get a copy of the new policy. It may seem like another burden to take on, but letting renters insurance lapse is just as dangerous as not having any at all.
You’re on the right path! Remember that if you start requiring new tenants to get insurance, then all must get it – and any old leases have to be updated to meet the requirement. Many different companies offer renters insurance. Some you probably know about – Allstate, Nationwide etc. – but there are other offerings out there as well. Lemonade promises transparency and is tech forward – tenants can get policies, pay claims, etc. all from their phones and whenever and wherever they need!
Make sure you let renters know as the landlord you are not responsible for their personal belongings, getting stolen, damaged etc. By putting that in writing, you can get out in front of any miscommunication between you and your tenants.
Making sure your tenants are insured doesn’t have to be a hassle. For more property management best practices head over to our knowledge center: