What are the the Benefits of Renters Insurance?
Did you know that renters insurance not only protects the personal belongings of tenants, but it is also useful for landlords if they need to cover a tenant’s losses caused by someone else.
While renters insurance might sound like an extra expense, it’s actually an affordable way to make certain that unfortunate events arise and damage personal property. Here at California Leasing Property Management, we require that all tenants carry renters insurance.
What Does Renters Insurance Cover?
As with any insurance, coverage depends on the policy taken out and the terms and conditions. Generally, renters insurance covers the following:
- Damages to personal property
- Liability for injuries
- Losses caused by theft
- Natural disasters
- Relocation expenses if the rental unit is uninhabitable
What are the Beneifts of Renters Insurance?
Let’s look at one scenario. Say there was a fire in the property, and no one is found at fault. The property owner’s insurance would cover the damage to things like the walls, electrics, and structure—but none of the tenant’s personal possessions. However, renters insurance would cover the damage to everything the tenants own up to the policy’s limit.
Liability coverage is another reason why renters insurance is vital. Liability coverage protects tenants against people who claim to have been injured near or on the property. It can also protect the tenant from damage claims to other people’s property. For example, a tenant could accidentally leave a faucet on and cause water damage to the property below. The tenant files a claim to pay for the damage they caused.
Finally, it is worth reminding tenants that some renter’s insurance policies include additional living expenses coverage. This could help cover unexpected costs from staying in a hotel if the property is inhabitable because of the damage caused.
How Do Landlords Benefit from Renters Insurance?
The first advantage for ensuring your tenants have renters insurance is peace of mind. Those renters that cause damage and don’t have coverage may simply abandon the property, leaving you to foot the bill. Often, the security deposit isn’t enough to cover the cost of repairs. Plus, you have to consider the time it takes to repair the damage—days, weeks, or months that you could be renting out the property to new tenants.
Here are some other benefits of ensuring your tenants have renters insurance:
- Additional living expenses—Renters insurance covers living expenses if the rental unit is uninhabitable. Some states require landlords to cover these if the tenant doesn’t have insurance. So, you can save yourself a lot of money if the tenant has an insurance policy.
- Stolen property—Renters insurance covers damages or losses for stolen property. Without renters insurance, a tenant could sue you because you have to ensure the property has adequate security. But they are more likely to claim on their insurance rather than file a lawsuit.
- Pets—Renters insurance lets you be a pet-friendly landlord. This makes it easier to attract tenants and reduce rental vacancies. Renters insurance that includes pet liability gives you peace of mind if your tenant has cats, dogs, or other pets.
- Landlord insurance premiums—Insisting tenants take out renters insurance can lower your premiums. For example, your premiums will shoot up if you make claims for property damage or injuries caused by tenants. Tenants who have renters insurance are more likely to accept part of the blame and claim on their insurance policy.
- A sign of a responsible tenant—Landlords should thoroughly screen all potential tenants to ensure they are good renters. Credit reports and background checks provide a part of the screening information. Tenants willing to take out renters insurance generally show they are more dependable and committed to their responsibilities.
We love our tenants and property owners, and that’s why after years of managing hundreds of properties in the Santa Fernando and Santa Clarita Valley, we’re confident that renters insurance is a requirement that everyone will agree is a necessity.