Consultative approach to renters insurance can benefit residents, properties
The decision of purchasing a renters insurance policy is ultimately up to the resident. But a property management company that offers the option of buying a policy specific to the multifamily industry could pay dividends all the way around.
Many insurance providers who specialize in other areas of coverage have gotten on the renters insurance bandwagon as apartment occupancy has ascended to record levels in recent years. But those policies may not always have the best options, say industry professionals. Property managers should team with a company that offers protection that best suits the renter and landlord. After all, the resident’s and property’s well-being is on the line.
“Property management companies want to make sure they’re recommending a good product, specific to the multifamily housing industry,” says Jay Stoltz, Director of Market Development for RealPage’s LeasingDesk Renters Insurance. “If they recommend a provider that doesn’t quite cover all the bases, then it may reflect poorly on the property.”
LeasingDesk recommends that property management companies work with a provider that offers a policy with the following coverages and features:
Protection from water damage
Flood insurance is a separate animal, but a good renters insurance policy should cover the resident and neighbors from interior damage caused by water damage resulting from broken pipes, busted hoses, etc. Adam Falkauff, vice president of insurance services at RealPage, Inc., says some policies won’t even cover their policy holder’s unit but will pay claims for nearby units affected by the accident.
“You want a policy that covers both,” he said.
Coverage for roommates and guests
Some policies don’t cover roommates or damage from guests, Falkauff says. The resident is ultimately responsible if he sets the apartment ablaze preparing those world-famous nachos. Same goes for that over-enthusiastic baseball fan who causes a fire by leaving a cigarette burning in the other room.
Closing the gap on personal property losses
A policy that closes the gap on personal property losses is a good bet, Stoltz says. Some companies determine coverage based on whether a claim is tagged a burglary or theft. In most instances, theft of personal belongings won’t be covered unless there’s been an obvious break-in.
“Some companies won’t cover theft of contents unless there is proof of visible forced entry,” he said.
Paying alternative living expenses
In the event of a disaster or damage that forces a resident to seek alternative living arrangements, renters insurance should come to the rescue. Residents sometimes assume that if their unit is damaged by a storm and requires moving out that the property should pay for the cost of accommodations. Not always so, Stoltz says. The right policy will pick up alternative living expenses associated with relocation and habitation in a hotel, rental house or other apartment, up to the limits of the policy’s personal property coverage. However, many policies only cover up to a very small fraction of these limits
Covering tenant liability
Many policies limit the liability coverage of pets to a portion of liability limits, often $10,000, and some exclude certain breeds. But policies are available that go beyond paying for damage due to stains, chewing and the like. Residents can purchase policies that pay for expenses related to animal bites. That’s important, Stoltz says. “The average dog bite results in a $30,000 loss.”
Multiple levels of coverage
Basic renters insurance policies may provide only a minimal amount of content coverage, but a resident who has a choice on the amount of coverage and deductible gets greater protection. Tailoring coverage enables the resident to adequately protect belongings and meet a desired budget.
Falkauff says a lot of companies don’t offer same-day coverage, which can create a gap of protection for a resident moving into a new apartment. Most providers won’t allow coverage until the next day. A policy that is effective the moment the keys are handed over is comforting protection for the resident and PMC.
A comprehensive policy that covers the resident – and property – from start to finish may sound expensive, but Falkauff says the cost is just pennies compared to how much it would be to replace something that’s uninsured. Policies typically cost $12-$20 per month, depending on the amount of coverage and location.