Renters Insurance: Top 10 Questions for Residents and Landlords

It only makes sense that a robust apartment market that has driven high occupancies would heighten the need for liability protection for resident and landlord. With each unit filled, odds makers will tell you that risk for loss increases.

A growing demand for renters insurance

Demand for renters insurance has risen since 2008 when the U.S. economic landscape changed. What’s traditionally been more acceptable in the single-family housing vertical is gaining traction in the apartment industry. Many properties are encouraging residents to take out policies – in some cases, it’s becoming a part of the lease agreement.

IBISWorld, an industry research engine, predicts that annual revenue from renters insurance will top $601.1 million by 2018, up from $545 million two years ago.

As renters insurance becomes more visible to the apartment industry, many are asking just what the protection can do for them.

So, what should renters, property owners and third-party managers know about renters insurance, and what are the most frequently asked questions?

Ed Wolff, president of LeasingDesk, says his company is fielding more and more inquiries from apartment industry representatives and residents about coverage. LeasingDesk is among a few companies that specialize in providing protection for both resident and landlord.

“We’re seeing that more residents and property management companies want to know just what renter’s insurance will do for them,” he said. “It’s something they should be asking about. There are a number of reasons why a resident should have a renters insurance policy, both to the benefit of the resident and the property.”

Top 10 questions about renters insurance

Questions run the gamut from who and what is covered. Here are the top 10 questions – with answers from LeasingDesk – about renter’s insurance that are on the minds of residents and landlords:

1. If the resident causes damage to an apartment building, is the resident the one who needs to file a claim? No. Either the resident, building owner or management company representative can report a claim.
2. Is rented furniture covered by the policy? Yes, it is covered if the renter selects contents coverage, just as furniture owned by a resident is covered.
3. I have two roommates, are they covered by the policy? The policy provides liability coverage for roommates (and guests) in the event that they cause damage to the apartment unit or community common areas. In order for a roommate’s personal property to be covered, the contents coverage must be selected and the roommate needs to be listed on the policy.
4. If I cause a fire, will my policy be cancelled? Usually, no.
5. If I have a claim, does my price go up? Typically, no. Your price will stay the same.
6. Are pets covered?  Bodily Injury caused by pets is usually covered a under a standard policy.  Building pet damage can be added in certain states.
7. Is damage caused by mold covered? Mold is not covered unless caused by a water event that is sudden and accidental. Other circumstances may or may not be covered. For example, if a tub overflows and mold grows in one day, it’s covered. If mold results from closet carpet that has been wet for days, it won’t be covered.
8. What about bedbugs? Insects are not covered.
9. If we discover that a resident who moved out punched a hole in the wall, is that covered? No. The policy covers fire, water, smoke and explosions. Intentional damage caused by a resident is not covered.
10.  If a resident dies in the unit, will the policy pay for cleanup? Up to $2,000 will be provided to the property management company for cleanup services of a specified provider.

Wolff cautions that some scenarios above and others may have extenuating circumstances that may determine whether coverage is available

Typically, premiums run $10-$15 per month.

“It’s something worth having,” he said. “Its money well spent.”

Read more at propertymanagementinsider.com

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