Why do you need a resident insurance program?
At Real Property Management Express in Sioux Falls, SD, we work hard every day to bring you the latest services to maximize your investment. One of the ways we do so is by requiring resident insurance. Residents must have $100,000 in liability insurance coverage. How does this sort of coverage help the property owner AND the resident?
The first example is what can happen when the coverage is not in place. On a warm early spring day in Sioux Falls, SD, Anne (a resident) hooked up a hose to wash her car, but she didn’t disconnect the hose when she was finished. That evening, the temperature dipped below freezing and caused the water pipe to burst inside the house. The water sprayed inside the ceiling and walls of the finished basement. Anne didn’t want to pay for the damage because she felt the owner’s property insurance should cover the damage. The owner didn’t want to turn in the claim because he didn’t want to pay the deductible and the higher insurance premiums that would result from the claim. The entire affair shattered the relationship between the resident and property owner.
The second example illustrates why our resident insurance program is a great value for both the owner and the resident. A few months ago, Joe (a resident) accidentally started a grease fire in his kitchen. Renter’s insurance covered the entire cost of the fire and smoke damage;. The total cost for all the damage was more than $30,000. No claim was submitted to the owner’s insurance. No claim means that the owner of the property will not have any increases in insurance premiums down the road. He also will not have any cost for the deductible. If Joe did not have the resident insurance and the owner would have started a claim, the insurance company could have potentially sued Joe for the damages. Joe could have had a $30,000 bill from the insurance company for an accidental fire!
We give our residents two options for purchasing renter’s insurance. They can purchase their own liability insurance policy through a third party company. The other option would be if they don’t have their own policy, we automatically purchase the required insurance on their behalf and bill them for it.
In either case we document and track the insurance coverage to make sure the resident continues to carry the required insurance. When the lease comes up for renewal is a great time to verify that the insurance is in place. This type of insurance is very inexpensive but provides great value for both the resident and the owner.
Note: Names have been changed for confidentiality.