More than 50% of adults aged between 23 and 29 years don’t have renters insurance. They might not know it, but this decision could be putting all their possessions at risk.
So why do many renters consider renters insurance unnecessary?
Three theories try and explain it:
First, tenants usually mistakenly think that the landlord’s insurance covers their stuff too. This is a huge mistake, as landlord insurance only covers the property itself and not the contents inside of it.
Second, renters often underestimate the value of their belongings. While they may not own a huge surround-sound entertainment system or a grand piano, chances are that they still have enough valuables to warrant insurance.
The cost to replace a television set, some jewelry, a laptop, clothes, kitchen ware and other items can all add up quickly.
Thirdly, renters often think that renters insurance is too expensive. The average per-month rate for renters insurance ranges from $15 to $30, according to data from the National Association of Insurance Commissioners.
Now, a renters insurance offers many benefits to you and your Antelope Valley, California tenant. In today’s post, we are going to share with you reasons why you should require it in your lease.
1. Protects your tenant’s possessions.
As already mentioned, the value of tenant’s possessions can quickly add up. And in the event that a disaster strikes, the property losses could be massive.
If this happens on your property, who do you think the tenant is going to shift the blame on?
Remember, as a landlord, it’s your responsibility to provide your tenants a safe place to live. So, in the case disaster strikes, you could find yourself fighting a lawsuit.
But if you require renters insurance, everyone can rest easy knowing that they are protected from most types of property damage.
2. Your premiums won’t increase.
Your insurance company may decide to hike your premiums if you make too many claims. In some cases, your company may even decide to cancel the insurance altogether when times come to renew it.
But with renters insurance, you can rest assured that all (or at least a portion) of the losses will be taken care of. Consequently, the chances of your premiums ever going up will reduce substantially.
3. It could allow you to become pet-friendly.
Now, there are those landlords that allow pets and those that don’t. Both usually have good reasons for their decision.
Those that don’t, for example, may do so because they are afraid that pets can cause avoidable damage to their property. And rightfully so, pets can chew, scratch, tear up or foul in the property.
Nonetheless, allowing pets has its upside as well. One of its main advantages is that you’ll be able to tap into a larger tenant pool. This is because up to two thirds of U.S. households own a pet, according to a survey conducted by the APPA.
If you decide to allow pets, there are many ways that you can make sure that you are well protected. You can require an additional pet deposit. You can also put restrictions on the type, number, and size of pet to allow in your property.
But even more importantly, you can require your tenants to get a renters insurance. This can help cover any excessive damage pets may cause to your property.
4. It may help cover your deductibles.
Suppose your tenant causes serious damage to your Antelope Valley rental property. Sure, your landlord insurance may help cover the losses. However, it’s you who will be stuck paying the deductible.
Moreover, bear in mind that your insurance company can only cover losses up to a certain limit. Thus, any cost beyond the limit will be yours to pay for. This may be a significant amount, which you may not need to pay if your tenant had renters insurance.
5. It can help you weed out unreliable tenants.
Renting to the right tenant is essential to the success of your rental business. If a tenant isn’t willing to pay the ~$20 a month for renters insurance, that’s a red flag. This tenant can be more likely to fail to pay rent at some point in the future.
As a general rule of thumb, always be in the hunt for renters that are responsible. That is, those that are willing to insure their possessions.
Responsible tenants usually pay rent on time, cause less issues, and are more likely to rent longer.
6. It shows that you are a responsible landlord.
Responsible landlords look beyond the rent check. They not only take good care of their properties, but they also have their tenant’s back.
Requiring your tenant to get renters insurance shows that you are concerned about the wellbeing of your tenant.
The cover ensures that any potential losses to your tenant’s belongings will be taken care of. Their costs of relocating while the unit is under repair may also be handled by the cover.
Can you require your Antelope Valley, CA tenant to have renters insurance?
Of course, you can! While not required by law, you will still be within your rights as the property owner to require it before signing the lease as part of the rental agreement.
What does a typical renters insurance generally cover?
Renters insurance compares similarly to homeowners insurance. It too can cover the cost of replacing personal belongings in case of theft or damage.
Besides theft, a renters insurance can also help cover:
- Liability for injuries. A good example is when the tenant slips and hurts themselves while inside the property.
- Natural disasters. Good examples include a wind storm, hail, rain, fire, and hail.
- Careless destruction of either their property or that of the landlord.
These are all solid reasons why any landlord in Antelope Valley should require their tenants to have a renters insurance.
By requiring it, both you and your tenant can rest easy knowing that neither of you will suffer financial ruin in case of heavy property losses.