This question has been kicked around a lot in recent years: Should you require your tenants to obtain renters insurance?
While some property management companies require their residents to purchase renters insurance, the vast majority continue to merely suggest that renters insurance be purchased. Unfortunately, this method of persuasion has done little to convince residents to do so. In fact, according to a survey by InsuranceQuotes.com, six in 10 current home or apartment renters do not have renters insurance. Why not?
Lack of knowledge. Many renters simply don’t realize that property insurance obtained by the owner will not cover the loss of their valuables in the event of a disaster (adverse weather, fire, theft, etc.). It will also not cover any loss from an accident that may happen in their home or apartment.
Perceived cost. Many people assume that renters insurance is expensive, when in fact, it’s very affordable. Current yearly premiums average between $200.00 and $300.00 annually—that’s less than 70 cents a day.
Short of requiring residents to obtain renters insurance, here are ways to persuade your residents to purchase renters insurance:
- Make it easy. Work with a local insurance agent to provide detailed information about policy coverage and costs, and include that information with the move-in paperwork. For current residents, distribute an informational flyer with their monthly rental invoice or newsletter.
- Become adept in answering questions about coverage and costs. You can certainly refer tenants to an insurance professional if you do not have the answers, but knowing basic coverage details and costs may help to persuade a resident to purchase insurance. If they don’t receive the answers from you, there is no guarantee that they’ll actually call the insurance agent to get those answers.
- Hold an ‘insurance information night’ at the property. Invite all of your residents and have a local agent available to explain the process. Having applications on hand as well may persuade those present to purchase insurance.
It might be wise to obtain a copy of the resident’s insurance policy and file it with their lease and other important documents. Be sure to give your current residents time to purchase renters insurance and follow-up to ensure that they have done so.
A win-win for both the resident and the property manager, renters insurance allows everyone to have a little peace of mind at minimal cost.