Renters Insurance Covers Real Losses
More landlords and property managers are requiring their tenants to possess renters’ insurance.
It’s a sensible solution for both landlords and tenants. You can find out all you need in this post.
According to an IbisWorld report, revenue in the renters’ insurance industry in 2022 reached $4.5bn although it did decline 10.3% last year. It’s not much of a profit center for insurance companies, as price growth is about 2% or less per year.
Of course, today, affordability is an issue for many renters as the economic downturn and inflation problem persists even in 2023. Some will be harder to convince of the wisdom of renters insurance coverage.
A Painful Loss, and Renters Will Look to You for Compensation
Renter’s insurance then offers peace of mind should something happen in your building or unit. A fire in one unit can shut down several adjacent units. Covered tenants helps you too. In the event of accidental fires, floods or infestation, tenants facing such personal losses would find an attorney to sue you as a last resort.
The mood of the government and the courts toward landlords is decidedly negative. Just do a search for “landlords” and a spate of hateful comments and news of litigation against landlords abounds.
Who will be held responsible in a fire/flood is determined by the courts and of course, you’ll likely be attending those proceedings.
Prevention is Compassionate
You can’t force current tenants to take out renters insurance, however you can encourage them via a good explanation of why it’s needed. They won’t believe coverage is necessary because few tenants believe such a thing could happen. By providing cases of tenant losses, you’re helping them.
You’ll also be able to show the courts after the disaster that you did encourage them to act for their own protection. You can require a renters insurance policy on new leases. Often, you can advise your tenants on sources of tenants insurance and perhaps acquire it via ManageCasa™. Keep in mind that some insurance companies may waffle on affordable policies, so do check with our sales reps on policies available via ManageCasa™.
ManageCasa’s Renters Insurance Service
As a service to property managers and you, ManageCasa™ is planning to make renter’s insurance coverage available from the ManageCasa™ platform. Tenants can log in to create a pre-approved tenant insurance applications, decide on coverage, get a quote, and subscribe to the monthly premiums. It will be an easy, automated, streamlined process to help put your mind at ease. You’re completely in control of your insurance.
Your landlord will be notified automatically that you are covered.
Insurance Rules and Regulations Have Changed
In decades past, the belief was that “someone, the landlord, or an insurer will cover me if something happens.” Times have changed, and those backups don’t actually exist anymore. When you try to make a claim to someone, you discover there is no one. You are responsible for your financial protection.
Today, with near zero vacancy rates, you’re in big trouble without a place to go should fire or floods destroy the rental unit you occupy. And buying new furniture, electronic devices and sports equipment from scratch is an uncomfortable prospect. And the courts may not have any remedies for your losses either.
Renters insurance helps you protect yourself.
Claim Denied: Changes in what insurance companies will pay out for today makes renters insurance a priority for many renters. The forgiving system that existed has been discontinued. Now you need your own coverage.
In some jurisdictions, renters insurance is mandatory, and in others, landlords and property managers are insisting on it, to protect the owner from legal action and from seeing tenants suffer. Because fires, storms and floods do happen.
Getting your Coverage
You might be thinking that renters insurance only covers your belongings and furniture. Where it’s actually needed is in accident liability. Right now, you may not be covered at all if you have a fire in the kitchen, or your bathtub overflows, or if someone falls in your unit and suffers a debilitating injury.
A research report indicated that only 41% of renters carrying renters insurance.
Typical policies can be as low as $20 a month (or $180 per year), and offer $100,000 liability and $15,000 in personal property coverage. That’s reasonable, however, actual insurance claim costs can easily rise above these levels.
Apartment Fires Will Happen
What Does Tenants Insurance Cover?
Tenant or Renters insurance policies cover you 3 ways:
1. Coverage for personal possessions
2. Liability protection
3. Additional living expenses (ALE)
All risk tenants insurance covers your personal property and gives you liability protection in the event of:
- Fire or lighting
- Windstorm or hail
- Certain water damage
What’s covered in your policy is covered in either all risk or named perils policy types. How much your premium will be depends on your building’s construction, previous claims you’ve made, and how much coverage you want.
You’re Not Covered by Your Parent’s or your Landlord’s Home Insurance
It’s all on you now. Renters are surprised when they hear that they aren’t covered by the landlord’s insurance which has its own set of coverage types and requirements. And they may not be covered by their parents home insurance either.
The landlord’s own insurance might not cover them for damage to the house, condo or apartment building by you. There really is liability exposure that could ruin people’s financial lives.
Landlords and property management companies want to reduce their high insurance premiums, and a tenant is often considered a costly liability by insurance companies. That cost instead must be passed onto you, the renter.
As noted above, renters insurance premiums are reasonable and consistent. Find out more about insurance rates at III.
Million Dollar Property Claims
Law suits and claims can actually be very expensive. Damage to a building creates costs in the tens of thousands of dollars. Who hasn’t had a kitchen sink overflow once or spilled something terrible on hardwood floors?
And a building fire started in your unit or balcony, could cost millions. The use of rental properties for drug manufacturing and grow ops has added pressure to make tenants more accountable for careless behavior.
The Upside on Renters Insurance
Aside from helping you sleep at night and feel less anxious when you leave your unit, renters insurance can protect you from theft at home, in your car, or even on the road in a hotel room.
And if you have expensive jewelry, collectibles, bicycles, sports equipment or music instruments, you can add a floater to your policy to in case you lose them or they’re stolen. Of course, you will have to pay a deductible fee if you make a claim. That’s primarily to discourage fraudulent claims.
If you live in cities such as Los Angeles, New York or San Francisco, or San Diego you’re likely paying up to 60% of your income to rent, however your pain could be much worse if you lose all your possessions in a fire, or they’re stolen.
Renters, are you tired of how your landlord or property management company manages communication and repair/maintenance requests? Do you hate the delays when landlords respond or try to reach you at the wrong times?
Have them take a good look at ManageCasa software for property managers. It’s convenient and fits in with your modern lifestyle. You’ll be doing your landlord a favor.
Take it for your own Test Drive Now!
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