Why Renters Insurance Shouldn’t Be Overlooked: Protect Your Investment

Did you know that 45% of renters cancel their policies before the end of their lease, with nearly 20% terminated within 180 days of issuance? That means that even if you check their renters insurance policy at move-in, your business could be at risk without monitoring that it remains active and adequate. Landlords and property managers often assume insurance remains active, but lack of monitoring could leave them vulnerable.

In this article, we will cover the importance of renters insurance, how tenants can get it, and why verifying ongoing coverage is essential.

Why Is Renters Insurance Important?

Renters insurance is, of course, crucial for tenants. Not only does renters insurance protect a tenant’s personal belongings from water damage, fire, natural diasters, and theft, but it also helps landlords when it comes to protecting their rentals.

For example, renters insurance offers liability coverage for tenants. This liability coverage protects property owners in case tenants are responsible for damages. This can have a financial impact on landlords as a lack of coverage can result in lawsuits or uncovered damages that affect your bottom line.

Verifying Tenants’ Insurance

Insurance verification across the rental industry is notoriously lacking. Many property managers simply request policy documentation without confirming with the carrier that it’s up-to-date and in force, leaving them exposed to expired or fraudulent papers. Even worse, some don’t require proof at all– they just take the resident at their word.

In order to ensure that your tenants have the required protection, you need to conduct the additional step of confirming their policy with the carrier. For many businesses, this is too time-consuming to do for each renter as they move in. Fortunately, some modern insurance tech solutions enable you to digitally streamline this process.

But that’s not where it ends. Stats show renters often cancel their coverage early, leaving landlords vulnerable. Tenant negligence of rental properties drives an average of $1.2 billion in property damages annually. So it’s important to have continuous monitoring to avoid the risk of lapsed policies that can lead to financial loss and liability exposure.

Proactive insurance verification and monitoring solutions offer landlords the ability to verify coverage remains active throughout the term of the lease. Some, like CheckMy Resident, also offer several other benefits including easy set-up, automatic monitoring, and embedded insurance options.

Best Practices for Landlords

•   Make renters insurance a lease requirement
•   Set up regular insurance checks
•   Use services or platforms that provide automatic verification

Conclusion

To recap the risks: Canceled or lapsed policies can leave landlords exposed to liability issues. Verify insurance policies regularly and consider using tools or services that automate monitoring. Protecting your investment is as important as protecting tenants, and renters insurance plays a critical role.