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A growing trend among landlords is to require tenants to buy Renters Insurance. Many landlords will not give keys to a new tenant without evidence that they have a policy. (See article in Wall Street Journal here)
Residential property owners expect some damage to their units; that’s why they collect deposits from new tenants. But occasionally a tenant, accidentally, will cause major damage that has implications for the tenant, the landlord and the other tenants as well. While commercial insurance will cover the complex owner’s losses, displaced or financially damaged tenants will likely find themselves uninsured and possibly seeking recourse against the landlord and/or each other.
When a tenant is responsible for a large loss, the landlord’s commercial insurer has the right to seek recourse against the negligent party. With Renters Insurance the tenant has personal liability protection, usually starting at $100,000. When a tenant causes damage to your property, your carrier can subrogate against their renters insurance policy to make the carrier whole, which then lowers your carriers’ overall cost of the claim. That, in turn, will lower your claims experience and thus your future insurance costs.
There are important steps to implementing a mandatory Renters Insurance program, and we have the tools to help you set it up. Call us today to find out more about this money-saving program for landlords.