Why Your Tenants Need Renters Insurance
What does renters insurance cover?
- Personal Property–Most people do not have enough money on hand to replace their clothing, jewelry, electronics, furniture and other personal possessions should they suddenly be destroyed—and landlord's insurance will not cover these items.
- Liability–Renter's insurance compensates an insured up to the policy limit if he or she is legally liable for bodily injury, property damage or medical expenses due to a covered accident.
Five reasons why you should encourage your tenants to get renters insurance:
- It eliminates headaches. Contrary to what many renters believe, landlord's insurance does not cover a renter's belongings.
- It reduces liability exposure. Unintentional fire is the No. 1 claim, and if a tenant is liable, their renter's policy will cover the loss up to the policy limit.
- It can lower premiums. Fewer losses paid under a commercial policy can equate to lower premiums.
- It covers additional tenant living expense. The business owners policy will not pay for a tenant's additional living expenses should a fire or water damage from a next door apartment force the tenant out.
- It attracts better tenants. Renters insurance creates tenant awareness and responsibility, ultimately making them better tenants.
Consider making renters insurance a requirement
Some property management companies have added language to their lease agreements requiring tenants to purchase liability insurance. Their tenants must show proof of insurance to obtain apartment keys. Laws vary by state.
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