More property management companies are including provisions in their rental agreements that require renters to carry rental insurance.  That is because rental insurance not only protects the renters, but it also protects the property management company.  Rental insurance primarily covers the renter’s possessions, however their coverage can ultimately reduce your liability and save your company a lot of money.

Renter’s Insurance Lowers The Cost Of Commercial Insurance

The first way it can save your property management company money is by reducing the costs of your commercial insurance.  Commercial insurance costs are lowered when they are in tandem with rental insurance because it mitigates the policy risk.  If the potential cost of damage is spread out over mutual policies, then the risk is much lower to the insurance company.  Lower risk means they can offer your company a cheaper policy.  Further, if a property manager offers a rental insurance as part of the lease agreement with the same insurance company, that can save even more money.  More coverage reduces the strain on the insurance company and they are more likely to offer you a less expensive risk.

Renter’s Insurance Reduces Your Liability

Secondly, renter’s insurance saves money because it shifts the cost of liability onto the renter.  For example, if there is an incident that damages their property in a no-fault scenario, their insurance will cover those costs.  This also extends to their property being damaged by a neighboring renter.  In those cases, you may incur the liability cost.  Also in cases where a renter is at fault for damage, you will have both the protection of their renter’s insurance and your commercial insurance.  This ensures that not only will you be compensated for the damage, but you are more likely to be compensated the full amount regardless of your deductible. 

Renter’s Insurance Protects Your Relationship

Finally, renter’s insurance protects your relationship with you renters.  Renter’s insurance helps define clear roles for financial responsibility.  If there is ever an incident, it reduces the need for costly, lengthy legal battles because both parties know what liability they have agreed to incur.  If these roles are clearly defined, it will reduce tension between property management and renters in the case of damage and lend to both parties working together toward resolution.  This keeps the relationship positive and will ensure renter retention, a key factor in saving money.

Renter’s insurance can save property managers big.  If you would like to learn more about the ways renter’s insurance can protect your company and your property, the experts at Occupancy Solutions.  Our knowledgeable staff can help you find the right commercial insurance policies for your property and advise you whether including a provision for renter’s insurance in your rental agreements is right for you.