Renters insurance has grown in popularity, and there are several good reasons for that:
- It’s cheap for your residents.
- It provides a lot of protection for tenants.
- It helps you protect your asset.
We recommend that owners require renters insurance in their lease agreements, and there are very few tenants who will push back against this. Many leases come with this requirement.
As an owner, your own landlord insurance protects you from liability, catastrophes, and loss of rent.
Tenants need the same coverage.
Renters insurance is an affordable and easy way to bring tenants peace of mind. It’s important that tenants buy their own insurance to cover their possessions as well as any risk that can come from accidents or disasters caused by them.
Irvine Tenants and Property Coverage
When it comes to renters insurance, the most important benefit this type of policy provides for tenants is the coverage for their personal property.
If a water heater explodes and damages some valuable electronics, the renters insurance policy will cover the cost to replace or repair those things. A landlord’s insurance policy will not cover those personal items, and the tenant would be left without any compensation for their damaged things.
Under your own insurance, liability and the structure of the home is covered, as well as all the home’s systems. But a tenant’s personal property is not. So, you need to require that renters policy to make sure your tenants do not suffer a major loss if something happens at the home.
Irvine Tenants and Liability Coverage
The renters policy will also cover liability.
If a tenant accidentally leaves a bath running and floods the entire property, the renters insurance will cover the repairs that are necessary. This will save your tenant from a lot of out-of-pocket expenses, protect his or her security deposit, and provide some relief to you too, because your insurance policy will not necessarily have to be involved.
If that flood requires a tenant to move into a hotel for a few days while the damage is repaired, their renters policy should cover some or all of those expenses.
As you can see, both you and the tenant receive some extra peace of mind when a renters insurance policy is in place.
Include Renters Insurance Requirements in your Lease
Let your prospective tenants know that renters insurance is required, and include that requirement in your lease agreement. You can ask to see proof that the policy is in force, and you can ask to see documentation of the renewal when they renew their lease.
You might also want to require that you’re listed as an additional insured on their policy. This will protect everyone under that one policy and ensure that you are notified if coverage lapses or changes. The cost of renters insurance isn’t high. Tenants shouldn’t have to pay more than $15 or $20 per month for full coverage. In some cases, they can bundle it with their automobile insurance.
Renters insurance is a huge benefit to both tenants and landlords, and we always recommend it to our Irvine property management clients. If you’d like to discuss this topic further, please contact us at HCM Property Management.