As a savvy real estate investor, you’ve probably made sure that you have plenty of insurance coverage to protect your assets. But what about your residents? Renters insurance isn’t just a tool to save money for your tenants. It also saves time, money and aggravation for property owners.
Imagine there’s a fire at one of your properties and residents have to move out while repairs are made. Renters insurance will cover their temporary relocation, improving the odds that they return and cutting down on vacancies. Or, let’s say a visitor’s property becomes damaged during that fire. Renters insurance will cover the cost of replacement so the visitor doesn’t have to come after you to be compensated.
For these reasons and more, many property managers choose to require that all tenants purchase and maintain renters insurance. If you haven’t done so already and are considering making this part of your policy, here are a few tips for a smooth implementation.
Make it clear up front.
Informing prospective tenants as early in the rental process as possible is always a good idea. We recommend including a blurb about this right in your property listings, along with any other rules or requirements. For instance, you might say: “Heat and hot water included, no smoking, no pets, renters insurance is required.” This way there’s no question what will be expected and prospective tenants will know right up front that there will be an added expense for them to consider.
Do the homework.
Making things as easy as possible for tenants will ultimately eliminate friction and improve compliance. For this reason, we suggest doing some research on various options that are available in your area. Providing a ready-made list of insurance providers and policy options can be really helpful to your tenants, saving them time and making the entire process much easier.
Make it convenient.
Another way to make mandating renters insurance simple and straightforward is to provide the ability to sign up right through your property management software. Not only will this make purchasing a policy quick and easy for your tenants, but you’ll also be able to keep track of which residents have complied and which may be in violation.
Educate your tenants.
If you’re planning on rolling out a renters insurance requirement to existing tenants, education is the key to compliance. Invite your residents to a meeting, either in person or virtual, and provide some information about the many ways this type of insurance coverage can benefit them. When you present it in a way that demonstrates the value, your tenants will be much more likely to view it as a positive thing rather than just an added expense.
Requiring renters insurance is beneficial, both to residents as well as property owners. Not only does it provide a financial safeguard for their personal property and extra protection for you, but it also indirectly shows that you care. By mandating coverage, renters insurance will be yet another way that you are able to deliver value to your residents.