October 29, 2015
We’ve Got You Covered: Tenant Insurance Audits
Did you hear about the renter who accidentally caused a fire by leaving their stove on while attending a Halloween party? When they came back, their unit was destroyed, and the fire had damaged furniture and electronics in the neighbouring unit. Talk about a Halloween horror story!
Fortunately, no one was hurt. Unfortunately, the resident who caused the fire didn’t have tenant insurance. They lost almost everything they owned and couldn’t cover the repairs to their unit. And they certainly couldn’t provide the amount their neighbour sued for in damages.
Property management companies understand the importance of insurance. But not all tenants get it. According to Statistics Canada, more than half of renters in the country don’t have the protection they need to help replace their belongings in the event of a fire, flood or other disaster.
This can create a sticky situation for everyone involved. Not only could residents lose furniture, clothes and other valuables, but if they can’t cover the cost of property damage, you could be left to clean up the mess.
So the question is: What can you do to ensure tenant insurance?
Follow-Up: The Golden Rule of Property Management
Leases typically include a clause indicating that insurance is required to rent in the building—and if your leases don’t, you should add that clause immediately. But even with these types of safeguards in place, many property managers don’t keep tabs on renters or follow up to make certain they purchased the necessary insurance. As well, sometimes residents drop their insurance coverage for one reason or another, and fail to mention it to the landlord when they renew their lease.
There’s no doubt about it: Property management firms need to have an audit system in place to ensure insurance.
For example, Property Vista’s solution makes it simple to perform annual audits, enabling you to track every lease and quickly identify which of your renters is—and isn’t—insured. Landlords or property managers simply need to go into the resident portal where the system instantly highlights if renters insurance is in place or not, and which policies are about to expire. It also includes a copy of the policy agreement confirmation.
Additionally, with Property Vista, you can offer your residents insurance through TenantSure, which not only adds another revenue stream, and helps improve coverage in your building, but it also notifies you when coverage is dropped. If renters have their own provider, that can be monitored as well.
Lower Risk, Higher Return
Property management companies are under increasing pressure to provide proof of insurance, or risk large increases to their premiums.
Property Vista has worked with companies facing premium hikes of millions of dollars, unless they can prove that at least half of renters have coverage. In some cases, businesses are given less than a year to perform and manage the audit. Without a system in place, this can be an almost impossible task. But having access to the right tools makes all the difference.
If you are starting to gear up for next year, one of the areas that has a solid ROI is ensuring that an insurance audit system is in place for your properties.
To learn more about how we can help you stay on top of your tenants’ insurance, sign up for your free account today or give us a call to learn more.