The bigger question is, Do you want tenants who refuse to get renters insurance even though you require it in the lease and they know there are repercussions for not having it?
Most landlords would answer no to that question. First of all, of course, there’s the obvious problem where they think that the rules just don’t apply to them. That’s a good indicator that they’ll think other rules don’t apply to them as well. That says other things about them. They’re likely to be problem tenants on an ongoing basis, and that’s just not a hassle you need. When they say they won’t buy renters insurance even though it’s required, it’s time to walk away.
The type of people who already have renters insurance and just need to change the address when they move into your apartment are the responsible type that you want. The people who don’t understand why you’d ask for it and will argue all day about it? Those are not generally the ideal tenants.
It’s not hard to find tenants in Queens, either. How long does an apartment stay on the market these days? Two, maybe three hours? That’s slight hyperbole, but not much. The market is hot, and expected to remain that way. With that in mind, please remember that you are not obligated to rent to people who won’t buy renters insurance. In addition, if the fifteen dollars a month is a hardship for them, you might want to consider whether their income makes them a good candidate as well.
But if you want to rent to these people and think you can get them to come around…
How Can A Landlord Explain Renters Insurance To Tenants Who Don’t Want It?
There are a few angles that you can try, and some of them might just be best practices anyway.
Your Stuff Is Not My Problem!
Explain to the tenant that you have no responsibility for their personal property, and will not be helping them to replace it if there’s a fire, a theft, or another kind of loss. Clarify to them that, since you have no insurable interest in their personal property, you legally couldn’t insure their property even if you wanted to, which you don’t.
In addition, it’s never a bad idea to get them to sign a statement to that effect as part of a lease addendum, just to avoid misunderstandings and make sure they know who’s responsible for what.
My Building Just Might Be Your Problem!
Advise the tenant that if their negligence is responsible for a fire, they’re responsible for it. They’ll ask if you have insurance, and you’ll tell them that of course you do, but…
- Deductibles on multi-unit rental properties start at the $10,000 range and go up from there – way up.
- The insurance doesn’t just pay for the loss and then go away. They attempt to recover their loss and they’ll sue the daylights out of the tenant who started the fire in order to get back what they paid out on the loss.
- If there were to be a portion of the loss that’s uninsured, they might be responsible for that, too.
Your Rent Is Cheaper Because My Insurance Gives Me A Discount When You Have Renters Insurance!
Would they rather pay another $75 a month in rent than have renters insurance? That’s not ideal, but you can tell them that your insurance is cheaper which makes their rent cheaper because this requirement is in place. Some people respond to this logic.
I’ll Know If You Cancel The Policy…
Because you’re the additional interest on the policy, you’ll know if they’re cancelling the policy or making other substantive changes to it. It’s not creepy, it’s called risk management. That’s enough to deter some people who would buy a policy, show it to you, and then cancel it the next day. But not all of them.
I’ll Refund Your Application Fee…
The best way to explain renters insurance to a potential tenant who doesn’t want to buy a policy is to let them know that you’re happy to refund their application fee because there’s no way on earth you’ll be renting to them. It’s that simple. Don’t rent without renters insurance, not even once.
And that’s the crux of it. There are no shortage of people who want to live in your apartment. Move on to the next applicant, the one who has renters insurance. No one should ever push back on this requirement, because you’re asking them to spend just a few dollars a month and it protects them just as much as it protects you.
There are a number of other ways to make sure you get good tenants who will keep their policies in force, but when they refuse to get renters insurance that’s required throughout the entire building, that’s a bad sign of a tenant you don’t want to be hassled with. So don’t rent to them, and move on.
Take It Easy…
Don’t let the sound of your own wheels… Wait, we means “make it easy.” Send them to Effective Coverage. They can buy a policy online in just sixty seconds. They’ll get a copy and you’ll get a copy, both instantly. The additional interest information will be on the policy. That’s all you need to do. It takes them one minute and costs well less than $200 a year. There’s no reason they should be pushing back.
To learn more about how you as a landlord can institute a renters insurance program that allows you to track policies and ensure that they remain in force and can even offer additional risk management benefits, just call 800-892-4308 and use option 3. Effective Coverage has extensive experience in risk management through renters insurance programs and can help you create a program that meets your needs and goals.
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