Why Should Property Owners, Property Managers, And Landlords Require Renters Insurance?

4 Categories Of Tenant Risk ManagementAs a landlord, you’ve got a great many things on your plate – repairs and such among them, often. Tracking renters insurance with reasonable liability limits, and ensuring that it stays in force, shouldn’t have to be one of them. It makes sense for landlords to require insurance. It’s a small additional expense for the tenants, usually averaging between $10 and $15 per month. By requiring this tiny expense, landlords can ensure that their interests are protected when – not if, but when – a tenant negligently damages the property.

Obvious Fact 1: Tenants Cause Fires.
Obvious Fact 2: These Fires Cost Property Managers And Owners Money.
Obvious Fact 3: Without Insurance, You Will Never Recover A Penny From Most Negligent Tenants Who Destroy Their Unit.
Obvious Fact 4: Tenants Don’t Always Pay Bills On Time.

Effective Coverage has a solution which will ensure a reasonable recovery, potentially allow your dwelling fire or commercial premiums to be reduced, and won’t cost you a cent.

There are several facets to the Effective Coverage Solution:
1. Require renters insurance from every tenant, every time – at move-in, at lease renewal, etc.

2. Track that insurance through a specially designed tracking platform which is set up to make it easy for you to verify coverage at any time.

3. Third party policies (bundled with the tenant’s auto insurance, for instance) have two requirements. They must list the property name, with Effective Coverage’s processing center address, as the additional interest. This means that Effective Coverage is notified of cancels, lapses, and the like and can make sure that you’re kept up to date with the status of your tenant’s policy. They also must, without exception, be paid in full for the policy term, with the same noted on the evidence of insurance or a receipt provided.

4. Effective Coverage strongly encourages tenants to pay in full for their policies. Generally, the policies are cheap – $125-$175 for the year in most markets, for most people. Payment in full reduces nonpayment cancels to zero, and ensures that the policy remains in force for the designated term. We do understand some folks have a hard time, so there are exceptions available in appropriate circumstances. Payment methods are structured, however, when offered, to give the best chances of the policy remaining in force because the tenant already has “skin in the game.”


In all states, property managers renting market rate housing can, may, and should require renters insurance. Some subsidized housing may only be able to “strongly encourage” renters insurance for their tenants, but we can help develop a program to encourage that and bring your participation rate up even in that situation.

Contact an Effective Coverage consultant today, whether you have five units or five thousand units to see how we can help you protect your investment, drive costs down, and ensure that the effects of negligent acts by tenants (who don’t own the property, and therefore have less incentive to avoid negligence) are drastically minimized.


Why Should Property Owners, Property Managers, And Landlords Require Renters Insurance? by

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