RISK #4
INCREASED INSURANCE PREMIUMS AND COVERAGE HEADACHES
Landlord insurance is already becoming more difficult and more expensive in many markets, particularly as insurers tighten underwriting standards. One of the easiest ways to protect your own insurance profile is to reduce the number of claims and disputes that funnel into your policy. When tenants do not have renters insurance, they are more likely to file claims against the landlord’s policy or involve the landlord’s insurer during a dispute. Even if the claim is denied, it can still create administrative burden, put the property under scrutiny, and contribute to higher premiums at renewal. Some insurers also view frequent tenant related incidents as risk indicators. Requiring renters insurance creates a clear separation: tenant losses go to the tenant’s policy first, reducing the odds that your insurer becomes the first call. In addition, renters insurance can include liability coverage that may respond before a landlord policy does in certain scenarios, providing an extra protective layer.
BOTTOM LINE: Not requiring renters insurance can increase claim activity and contribute to higher premiums or harder renewals for landlords.
PAGE 39
Powered by FlippingBook