Requiring Renters Insurance

Preventing property loss

By Leah Etling on Sep 25, 2012 in News | 3 Comments

It takes more than just cash on hand for first month’s rent and deposit, good credit and an acceptable background check to move into your next apartment these days. Multifamily properties are now frequently requiring new renters to provide proof of renters insurance, too.

A recent article from Multi-Housing News focused on the reasons why more than 66 percent of respondents to a National Multi Housing Council survey said they now require residents to be insured. That’s a significant increase, growing 22 percent in just one year.  In fact, the percentage is now even higher, since the latest survey results were compiled in 2010.

So why the new stress on carrying insurance, which most renters consider because it provides for replacement of belongings in the event of a break-in or fire? Multifamily firms are protecting themselves, too. In the event that a resident damages an apartment unit, they will be able to recoup the costs of repairs from the residents’ insurer.

We spoke with Trip Stanford, a Yardi Systems industry principal specializing in risk management solutions, to gain additional insight into this growing trend.  ResidentShield renters insurance is an easy, convenient, low-cost option for renters who want to protect their belongings, and for multifamily communities who want to protect their property.

Read on to see what Stanford shared about how carrying such a policy – or mandating it for tenants – can be a win-win.

TBS: What insight can you give us into why more major multifamily housing providers are now requiring residents to hold renters insurance? 

TS: Many management companies have experienced a property loss as a result of resident negligence and have faced significant financial loss as a result.   Many management companies now view mandatory renters insurance programs as an effective means to transfer risk to the resident-occupants of their apartment homes.

TBS: What are the risks involved for multifamily firms that choose not to make renters insurance mandatory?  

TS: Should a resident cause a loss (fire) without a renters insurance policy the landlord has two options:  seek monetary recovery from the resident, or file a claim against their master policy and pay a high deductible.   Having a mandatory program in place enhances the overall image of the community and provides ‘peace of mind’ for residents and landlords alike.  No more adversarial resident/landlord disputes over who is liable and ‘on the hook’ for damages.  

TBS: From a residents’ standpoint, what personal benefits can they derive from being asked to purchase renters insurance? 

TS: The resident gains a level of legal protection in case he/she (or a guest in the unit) is found responsible for an accidental loss at the community.  In addition, the ResidentShield Protection Plan offers the resident personal contents protection at attractive rates.  In case of damage or theft of personal property, the resident has a cost-effective means to protect their own belongings.

TBS: Tell us about the features that ResidentShield offers, both for multifamily clients who might suggest their residents consider a ResidentShield policy, as well as for residents looking into an independent rental insurance purchase? 

TS: The ResidentShield Protection Plan offers both liability and personal contents protection at very affordable rates.  Obtaining instant online quotes and purchasing a policy is easy via www.ResidentShield.com.  Residents of communities who offer ResidentShield are pre-approved for fast and easy enrollment and landlords obtain instant electronic policy purchase notifications.  The  ResidentShield customer care support team is available to assist residents with policy quoting and program enrollment.   Management companies report the ResidentShield program is easy to implement and administer with the on-going support of the ResidentShield customer care team for training, brochures, coverage inquiries, anything that may occur at a busy community.  Each client receives a customized program implementation schedule that accommodates the busy schedules of onsite leasing staff members.  ‘Refresher’ training is available upon request – no worries!

TBS: Does Yardi have any technology offerings that allow properties to track resident compliance with a mandatory rental insurance requirement? 

TS: Yes, the ResidentShield Protection Plan is built into Voyager!  No working in two systems and double-inputting policy data!  All policy information ‘auto-populates’ into your Voyager workflows and screens.  Program compliance tracking and reporting is easy as it’s all contained within Voyager, at your fingertips!   

TBS: Anything else you’d like to add? 

TS: We believe the ResidentShield program offer residents and landlords an attractive ‘win-win’ in that both sides gain peace of mind and assurance that in the case of an unexpected accident, everyone is protected.  We think this is why so many management companies are making the smart decision to implement these programs today.