When most people think about renter’s insurance they think about the optional insurance policy that a tenant can use to cover them from theft and damage. However, here at Alpha Property management, we want to encourage you to think of renter’s insurance in a whole new light.
You see, when potential tenants begin exploring your properties without insurance in place, you could be exposing yourself to severe liabilities in the event of damage or injury during showings.
As always, here at Alpha, we want to show you every possible way you can protect yourself and your portfolio from potential disaster and increase your profits by requiring renter’s insurance. In today’s post, we will explore the various reasons why requiring renter’s insurance should become a standard practice in managing your Sacramento properties.
The Numbers Don’t Lie
Although we never want to think about tragic accidents occurring, you have no choice but to plan for them when you are a landlord. Accidents happen, a lot, and if you don’t have protection in place it could lead to your financial ruin. Think of it this way, did you know that 50% of all house fires are caused by human activity like cooking? If your tenants cause a fire and do not have renter’s insurance, everyone will experience loss including your tenants.
When Renter’s Resist Getting Insurance
The primary reason that most tenants hesitate about or resist the idea of getting renter’s insurance is that they don’t realize how it protects them. Many assume that an owner or property manager has enough insurance to protect them in the case of a fire or any other accidental damage. However, that is often far from the truth.
The reality is that when disaster strikes, the best protection a tenant can have to protect themselves from suffering major losses is with a renter’s insurance policy.
In the unfortunate event that something happens rendering a unit uninhabitable due to extensive damage, that renter’s insurance policy will provide the tenant with funds to cover their temporary living expenses, as well as, belongings like furniture, clothing, and jewelry. However, if your tenants are still resistant, you might want to consider a Tenant Liability Insurance program in which you would enroll tenants who haven’t provided proof of renter’s insurance. This type of coverage pays the landlord or property manager for damage done to the property if the tenant is found to be liable for the damage caused.
Disclose, Disclose, Disclose
Tenants are more likely to be resistant to purchasing renter’s insurance if you force the idea on them suddenly. However, if you include the requirement in the lease terms and explain the requirement upfront from the beginning, they are more likely to be accepting. Especially, if you provide them with resources to quickly calculate what their policy might cost. Often, when they see how cheap it is renters are more than willing to accept this term. Furthermore, if you plan to obtain additional coverage through a Tenant Liability Insurance program, you should also disclose that upfront along with the fact that it will NOT protect the tenant.
Need Help Managing, Protecting & Optimizing Your Sacramento Rental Property?
As you already know, there is so much more to successfully leveraging rental properties that simply sticking a tenant in the unit and collecting rent. You have to have a firm grip on marketing, technology, legal liabilities, insurance policies, lease agreements, branding, networking, and so much more. That is unless you hire an experienced Sacramento property manager to tackle all of that for you so you can go about your life while enjoying timely rent deposits. If you would like to learn more about how Alpha Property Management can become your most valuable asset as a landlord, give us a call today.