Property damage is a real threat to landlords. A single fire or flood could cost upwards of $50,000 and the situation can get worse if it was a resident who caused the damage and they don’t carry renter’s insurance.
Two-thirds of renters in Utah do not carry renter’s insurance and landlords often feel that the hassle of convincing their residents to sign up is not worth the aggravation. However, just one accident can set a landlord back in cash flow enough that they’ll still be paying for it years later.
At Smart Housing, we are concerned with making sure both the landlord and resident experience is...well...smart! And renter’s insurance is a big part of the ‘Smart Process.’
Question #1 - Why require your residents to have renter’s insurance?
If a renter is negligent it is your property that will pay the price. Without renter’s insurance, you will be fronting the cost for any damage that occurs. But if your resident does have renter’s insurance, you do not need to worry about what damage could potentially happen to your property.
In the case that damage occurs that is not caused by a resident, you will be seen as the hero in the situation. Your resident will be glad you required them to get insurance since any loss of their personal belongings will be covered.
One tenant tearfully told their landlord that they just got a $22,000 check from their insurance company and they were so grateful to the landlord for the insurance requirement. Without it, they would have been in a lot of trouble since they would have lost everything and had no money to replace it.
Question #2 - What should my tenants be required to do?
Specific tips can be taken from professional property management companies. Until a resident provides them a copy of their renter’s insurance policy, they don’t give them the keys to the apartment.
It is also important that the landlord’s name be added to the policy. This is in case the resident is unavailable or uncooperative in filing a claim. With your name on the policy, the landlord can file a claim themselves.
It is also a good idea to require your name be included on the policy as ‘Additional Insured’ or ‘Party of Interest.’ This will ensure that if the policy is cancelled or not paid, that notice will be sent to you and you will be aware of the fact.
Question #3 - Where should I recommend renters get renter’s insurance?
Currently, this solution is being developed by Smart Housing. We want to make sure the set-up process is simple and quick for the landlord and the resident. As it stands right now, many landlords and residents complain about the complexity of the issue.
If you would find this feature a useful addition to the existed Smart Housing products, please comment below. Also let us know of any other options you would like to see.
