One of the costliest mistakes renters make is to opt out of getting tenant insurance. It’s bad news for them if they’re unfortunate enough to be victims of theft, fire or water damage. It can also cause significant problems for their landlords and property managers.
If your residents damage your property (intentionally or not) and don’t have proper coverage, you could find yourself picking up the tab for repairs, as well as for replacements to other renters if the damage goes beyond the culprit’s unit. If a tenant doesn’t have insurance to cover stolen belongings, they may default on rent while they recoup their losses.
From a property management prospective, tenant insurance is a must. Yet in spite of a rising number of renters across Canada, only about half currently have tenant insurance.
It’s a growing problem, and a lot of it stems from misinformation. Many renters, particularly students and younger residents, assume that insurance will be too expensive and that they don’t really need it because they don’t own a lot of pricey possessions. What they don’t know is that tenant insurance is relatively inexpensive (especially when compared with monthly cell phone bills or Internet fees), and that it goes far beyond covering the cost of stolen or damaged property.
Tenant Insurance 101
Here’s what you need to make sure your existing and prospective renters know about tenant insurance – and why they need to get it.
Valuable or not, it’s expensive to replace everything. Too often, renters mistakenly assume that because they don’t own expensive jewellery or electronics, they don’t need to bother with insurance. But if clothes, furniture and even inexpensive electronics are destroyed by fire or water damage, the replacement costs add up very quickly. The truth is, residents can’t afford NOT to have tenant insurance, no matter the price tag on their initial purchases.
A little insurance goes a long way. Tenant insurance covers theft, water and fire damage to renters’ units and belongings. There are also insurance options available to cover loss and accidental breakage of possessions, as well as short-term living expenses such as hotels and meals if tenants’ units become unfit for dwelling due to a claim. Point your renters here for more information on the merits of tenant insurance.
Liability protection is priceless. And then there’s the L word. The costs of replacing stolen or damaged property can run in the thousands or tens of thousands. Legal costs resulting from personal liability for damaging other residents’ property or causing injury to visitors can run in the millions. If a tenant’s faulty toaster starts a fire that damages their unit or other parts of the building, they could be held accountable for repairs throughout the complex. Even worse, if a guest gets hurt tripping on a cord or other hazard in the tenant’s unit, they could be financially responsible for damages. Having the right insurance plan in place is critical to avoid devastating fees.
It doesn’t take much. Standard insurance policies are very reasonably priced. For as little as $10 a month, tenants can secure ample coverage for their belongings, as well as around $1 million in liability insurance. Not to mention peace of mind. There are plenty of options available for renters, with rates varying depending on the insurance company they choose and the value of their possessions, as well as building location and how it was constructed. Tenants can choose the type of insurance that best meets their needs.
Ensure a Better Bottom Line with Tenant Insurance
Tenant insurance protects you as well as your residents. It’s a win-win proposition, with benefits that greatly outweigh the costs.
Encourage your renters to purchase tenant insurance. Or go one step further and include it as a condition of your lease. The bottom line: Do what it takes to protect your property. It’s one of the best investments you’ll ever make.
Here at Property Vista, our online module acts as an insurance audit system, so you can ensure that all your residents are covered! We offer fully integrated tenant insurance offering that makes it easy and affordable for tenants to enrol.
To learn more about how we can help you stay on top of tenant insurance and boost your bottom line, sign up for your free account today.