Over the years, Oak City Properties has written blogs highlighting the importance of renters insurance.
- Why it is important to have renters insurance.
- What to know about insurance for your rental property
While we don’t want to sound like a broken record, we do want to take a minute and revisit this idea through the lens of 2023.
Renters Insurance Trend
Over the past few months, we have noticed a renters insurance trend that is quite alarming for landlords, tenants and property managers. It seems that renters are acquiring insurance for a rental unit to fulfill the lease’s requirements, but they are canceling the policy after proof is provided to the landlord.
Essentially, the renters are getting coverage for the property long enough to check off that box for the landlord (or property management company) and then simply canceling after the first month of coverage.
Problems With This Insurance Trend
Renters insurance is a policy available to individuals who rent their home or property from another person where the policy protects the contents of the tenant’s home and offers liability coverage if issues were to arise. Renters insurance provides an extra layer of protection for both the tenant and the landlord. When a tenant doesn’t have renters insurance, there is a risk that personal property may be damaged and not covered by the landlord’s insurance policy if something were to happen to the unit.
Let’s take this a step further and throw out a hypothetical scenario. Pretend a rental property was to catch fire, and all personal belongings were lost along with damages to the unit. The landlord would be protected by his/her dwelling insurance and be provided the proper funding to fix the unit. However, the landlord would not be provided with any additional money to take care of the tenant’s personal property ruined during the fire. The landlord and the insurance company are only responsible for the money needed to fix the dwelling.
Where does that leave the tenant? If the tenant has renters insurance, their personal items will be covered under their insurance policy. If they do NOT have renters insurance, they will be required to replace the items with their own money.
Benefits of Renters Insurance for Tenants
Renters insurance is an added layer of protection for the tenant. The benefits are as follows
- It protects all personal property in the event of “peril”
- It provides liability protection if someone was injured while in the home
- It can provide additional living expenses (food, temporary housing, etc) if something were to happen to the unit
- It provides coverage for “accidental damage” done to the property
- It provides coverage for dog bites (if the tenant’s dog were to bite someone)
- Some policies will cover possessions if there are stolen for a car of hotel room
Benefits of Renters Insurance for the Landlord
North Carolina law states that renters insurance is not required. However, landlords can require renters insurance as a way to vet and screen potential tenants. There are some benefits to requiring renters insurance
- Reduces risk of a tenant lawsuit
- Protects the property owner in the event of property damage
- Lowers the chance of an increase in insurance premiums
Benefits Outweigh the Risk
From the benefits listed above, it is easy to see that renters insurance protects the tenant more than the landlord. This fact alone should curtail the current trend of terminating renters insurance after proof is provided to the landlord.
One way to help with keeping tabs on renters insurance is to hire a property management company to aid in the running of the property. A full management service will market the property, find tenants, provide 24/7 maintenance, help with accounting/tax services, decide on the right insurance options for our property and tenants and deal with any court appearances in the event of an eviction.
At Oak City Properties, we have been helping those in the Raleigh area purchase and sell homes for years! Whether you are a family trying to sell your home or a landlord wanting to downsize your rental portfolio, our full-service property management company is here to help.
If you are interested in learning more about our services or want to speak to our listing agents, give us a call at (919)-232-9222 or check out our website: www.oakcityproperties.com.
Want to read more?
Take a look at the following blogs about property management services:
- 7 Benefits of Using a Property Management Service
- Do You Need A Property Management Company?
- How a Property Management Company Can Help with a Vacant Rental
*Follow us on social media to learn more: