(Photo : 5 Reasons Why You Should Encourage Your Tenants to Get Renters Insurance)

Many renters believe their property management policy or landlord policy will cover anything that might necessitate insurance, but this is not the case. Renters insurance is an excellent tool for your tenants as it offers protection for their belongings, medical charges, and property damages, among other things. Here are the five reasons why you should encourage your tenants to get renters insurance.

1. Liability coverage

Accidents happen at the least expected time, and a guest might get injured because of a tenant's negligence and choose to sue them. No tenant is ever ready to deal with liability claims filed against them, and this is where renters insurance comes to their rescue. Liability coverage will help in protecting the tenant against meeting the high costs of such cases, in terms of legal bills and damage compensations.

In addition, a tenant's direct or indirect actions could lead to incidents such as accidental fires, leading to damages on your property. You will need the assurance that they will compensate for these damages, and a tenant with renters insurance will easily meet these costs.

2. Coverage of tenants belongings

Your tenants need to understand that your landlord policy does not cover their personal belongings. In the event of severe fire, water, or weather-related damages such as ravaging tornadoes, they stand to lose all they own unless they have renters insurance. It gets better as most policies not only cover personal belongings when damaged but also in the event of vandalism, theft, and other losses.

3. It's affordable

Most tenants avoid getting renters insurance because they think it is expensive. This couldn't be further from the truth, as statistics by the National Association of Insurance Commissioners show it is among the most affordable insurance policies. Typically, renters insurance is calculated based on an individual's risk profile, and it can easily be tailored to suit the tenant's lifestyle and needs.

4. Cover additional living expenses

A rental property might become uninhabitable due to several factors such as natural calamities, extreme water damages, or fire damages. A renter's insurance policy will cover these unexpected setbacks by paying the affected tenant above and beyond their normal living expenses. This is done under the loss of use coverage, also referred to as additional living expenses (ALE), aimed at making it simpler to meet new housing costs and increased living expenses.

5. Lowered premiums of a landlord policy

Landlord policies are a must-have, but they can be quite expensive. Encouraging your tenants to have renters insurance will help reduce premiums as fewer losses will need to be paid under the commercial policy. Renters insurance also builds the confidence that your property will attract better tenants who are aware of their responsibilities. This is a bargaining chip that you can use when negotiating your premiums, reducing your overall expenses.

Endnote

Every landlord needs the peace of mind that they will never have to deal with sudden expensive losses or lawsuits because of their tenants. An effective solution to this is encouraging your tenants to get renters insurance.