Why do Tenants go without Renters Insurance?
In order to:
- Get a License, the law requires you have insurance.
- Get a Loan, the Lender requires you have insurance.
- Lease a commercial space, the Lease requires you have insurance.
What does it take to rent an apartment?
Multiple surveys of Renters report that somewhere between 56 to 72% of Renters DO NOT purchase Renters Insurance. On multiple occasions, I have asked insurance adjusters and firemen what percent they see. They believe the number is as high as 95% go without insurance.
There are several myths that Renters provide for reasons not to purchase insurance:
Myth #1: “I don’t have enough stuff to need insurance coverage.”
- Most people’s belongings are often worth more than they expect. With furniture, electronics, microwave, appliances, clothing, photos, sports equipment, books, and jewelry; you can easily begin to reach $20,000.
Myth #2: “Since I am a renter, my landlord will cover property damages.”
- If you are not making it clear to tenants in writing at the beginning of their residence, don’t be surprised.
Myth #3: “Renters insurance only covers my personal belongings.”
- Third party liability is typically included for Property Damage & Bodily Injury.
Myth #4: “Renters insurance is too expensive.” *(US News & World Report)
- Average cost $15/month
Q: Why do so many tenants not purchase Renters Insurance?
A: Landlords are not requiring Tenants to purchase the coverage.
Q: What happens when a tenant catches your building on fire?
- If your tenant has Renters Insurance, and the Rental Agreement holds the tenant responsible, the Renters Insurance will pay for repairs to your property.
- If your tenant does NOT have Insurance, you will have additional costs:
- Increased cost of Insurance due to the claim.
If you own multifamily property and do NOT require Renters to carry insurance, I believe you need to ask yourself why.
If you own more than 100 units, there is an easy solution.