Despite the substantial damages from Hurricane Harvey and Irma last month, renters across the U.S. are hesitant to pay for renters insurance. In fact, it seems like natural disasters do very little to convince renters to get insured. The Insurance Information Institute found in their poll that only 41% of renters had renters insurance in 2016 (amid raging wildfires in California and Tennessee, flooding in Louisiana, and Storm Jonas on the east coast). As a lot of residents may believe your property’s insurance will cover damages or theft, it’s all the more vital that you try to convince your renters to take precautions before disaster strikes.
When Times Get Tough your Residents will Look to You to Pay
As a property manager, you know good and well that your community’s insurance policy doesn’t cover your resident’s personal belongings – but unfortunately, this isn’t common knowledge amongst renters. “A lot of people are under the misconception that if they live in a studio, house, etc, that your landlord is going to be responsible for your belongings,” vice president of the Insurance Information Institute stated in Forbes.
A 2014 Nationwide survey found that 46% of residents ages 23 to 29 don’t even think they needed renters insurance.
While (*knock on wood*) it is unlikely that a natural disaster will be at your property’s footsteps within this year, requiring your residents to be insured eliminates misunderstandings about who is paying for what from the get go. In some situations, renters insurance will even cover a resident’s rent if they are unable to pay or their relocation expenses after a natural disaster. During the aftermath of earthquakes and floods, you’ll be able to direct your residents to their renter’s insurance provider on what steps to do next, letting you focus on getting the property repaired properly.
Expenses put a Strain on your Relationship with your Residents
Naturally, dealing with the expenses of a natural disaster or burglary will put a strain on you and your resident’s relationship. Your renter not only has to deal with cleaning up and replacing destroyed belongings, but with everyday expenses like rent and utilities. On top of an already stressful situation, having just a handful of uninsured residents can make your relationship with your entire community tense. No one wants to find out that for the same price of a Netflix account they could have avoided the hassle of replacing their damaged belonging themselves, especially not an entire building of renters.
Encourage your residents to get renters insurance by checking to see if your property management software has insurance integrated into it. This makes taking precautions before a disaster easier for your renters. After a rental applicant becomes a resident, CICTotal Manager automatically sends them a notification reminding them to get renters insurance (with an option to get a quote and purchase insurance directly through the site). At the very least, your property management software should keep track of all of your resident’s insurance policies.
No matter where your rental property resides, renters insurance is essential to eliminating misunderstandings over who will reimburse the renter for damages, avoiding a strain on your entire community, and rental liabilities. Renters insurance also covers things like guest injuries on the property (like dog bites) and theft. You already protect your community with tenant screening, but why stop there?
Does your rental property require renters insurance? How many of your residents do you think are prepared for a natural disaster?
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