After having to pay for rent, pet rent, parking and whatever additional ancillary fees their community might require, taking on another expense is probably the last thing renters want to do. But finding out the hard way that they should have had renters insurance is even worse.
That’s why educating renters on the importance of renters insurance is an increasingly recommended practice for apartment operators.
Many residents assume that if their personal property is damaged at your community, that the community itself is responsible. But that is seldom the case, and sometimes it’s fairly ambiguous. In the case of a fire, for instance, the community typically is responsible for damage to the building’s structure and fixtures, including cabinets, countertops and other apartment features. The resident, meanwhile, is responsible for damage to their personal property.
Requiring renters to have renters insurance is a proactive way to help mitigate loss recovery before it happens. Residents are much more likely to remain at the community if their damaged belongings can be recovered via renters insurance. This also helps avoid any disputes that could lead to a rash of potentially damaging negative reviews.
Problem is, many residents will work their way around renters insurance requirements. About 80 percent of property management companies now require renters insurance, but not all of them strictly enforce it. To circumvent the system, many residents will obtain renters insurance at move-in to provide the required documentation. But an estimated 15 percent will then cancel the policy.
Even if the community requires to be named on the policy, it can take as long as 45 days for the insurance company to notify the community of the change or cease of policy. And those communities not named on the policy might never know the resident canceled.
That’s another reason why education is key. Bella Posta, an R.A. Snyder-operated community in Mission Valley, Calif., recently teamed with the Red Cross to educate renters on the importance of renters insurance. The response from residents was fantastic, according to community manager Lissa Havens, who indicated residents embraced the idea after gaining a full understanding of why it’s important.
While this is a proactive way to educate residents, it might not always be feasible. But there are other ways to convey the message: Be transparent and include a list of items the community covers and does not cover as part of the move-in packet. Pass along a list detailing average prices of common personal property items, such as flat-screen televisions, furniture, clothes, etc., and compare it to the average cost of renters insurance (sometimes a minimal premium will cover up to $30,000 in damages). And have a preferred provider, so renters can easily reach out and don’t have to research companies on their own.
In addition to helping cover costs for damaged property, renters insurance also typically covers hotel bills for those temporarily displaced by an uninhabitable home. It also serves in a liability capacity, as it will usually cover someone else’s costs for damaged goods or medical bills that are the result of accidentally caused damage by the resident.
Disaster loss recovery is a challenging concept as it is. But making certain your residents have renters insurance and properly tracking it can help avoid many of the associated headaches. For more information about how Entrata can help you better protect you and your residents with renter’s insurance, click here.