With resident negligence leading to an average of $1.2 billion in property damages annually, renters insurance is a critical safeguard in protecting your investment as a landlord.
But many renters are shockingly unprotected. Recent data finds that only 55% of renters have an active insurance policy, even though 84% of multifamily communities require it.
So why are so many renters willing to forego insurance? Some of the top reasons include:
Misconceptions
About Coverage
Some residents are misinformed about who’s responsible for what damages in their rental. In fact, 57% of renters are unsure who’s responsible for burglary or property damage or think it’s the responsibility of the property manager.
Cost
Concerns
Many residents assume that insurance would add be a strain on their budget. However, the average renters insurance policy only costs ~$18 per month for tens of thousands in coverage.
Undervaluing
Personal Property
Many residents underestimate the value of what they own, and therefore how much they have to lose. In reality, the average renter has roughly $30,000 in personal property.
Why You Need to Require Renters Insurance in Your Lease
As a rental property owner, you invest a lot of time and money in your investment. That’s why you need to take the right precautions to protect it.
In this guide, we talk about why your rental agreement should mandate renters insurance, and how to add it to your lease.
Renters Insurance One-Pager
A guide for renters
Renters insurance is an essential safeguard for those renting a home or apartment. It helps protect renters' personal property from events like theft, fire, or water damage, which can otherwise lead to significant out-of-pocket expenses.
However, with 45% of tenant uninsured, it's clear that many don't recognize the value of securing coverage. This one-pager dives into the benefits of getting a renters insurance policy, and why every renter should have one.
Email template for your renters insurance program
Creating a sequence to educate your tenants about how to navigate renters insurance is a great way to speed up the move-in process and reduce administrative burden for your office. Especially for communities that already run a series of communications for new residents, incorporating renters insurance into your sequence can be a low lift with high impact.
Here's a template* you can plug into your CRM or PMS to streamline your renters insurance program.
*Note that some listed details and requirements may not apply to every rental community. Feel free to change the copy as needed to fit your company’s existing process.
Subject line: Complete your renters insurance requirement
Hi [tenant name],
I wanted to notify you that per your lease, renters insurance is required for your unit. We’ll need to verify that you have qualifying coverage through our automated process by [move-in date].
Requirements:
Based on the terms of your lease, you’re required to have a minimum of [required amount] in liability coverage for your unit throughout the duration of your lease.
Note that many standard renters insurance policies may not cover damage related to flooding. If you live in a high-risk area, consider obtaining a separate flood insurance policy.
What to know about renters insurance:
If this is your first time purchasing renters insurance, here are some resources to learn more about what it is and how it works:
When evaluating renters insurance options, be sure to thoroughly review the policy information to understand what it includes (and what it doesn’t).
How to get renters insurance:
If you don’t already have a qualifying renters insurance policy, you can secure an affordable plan that fits your needs here: https://app.modives.com/renterapplication/policyForm
How to verify your renters insurance:
We verify that your policy is active and adequate through CheckMy Resident. Once you’re ready to initiate verification, go to this link: [CheckMy Resident link]
Note that as part of our renters insurance verification process, we’ll set up ongoing monitoring to ensure that your policy remains active and continues to meet the requirements of your lease.
What happens if you don’t have insurance:
If you don’t purchase and verify a qualifying insurance policy by [move-in date], you’ll be automatically enrolled in liability-only coverage until a sufficient policy is verified. Your account will be charged [cost] on a monthly basis to cover the cost. Any charges placed will not be refunded.