Today, I’m going to be talking to you about some pros and cons of requiring renters insurance for your Birmingham tenants.
I’m going to go through a couple things that are for it.
And then I’m also going to talk to you a couple things about why you may not choose to require a renters insurance for tenants in Birmingham, Alabama.
So, to start off, we’re going to go with reasons why you would want to require renters insurance for your tenants in Birmingham.
Obviously, you should be having homeowner’s policy for any property that you own.
This is going to be an addition to that policy.
The tenants would be required to acquire their own renters insurance policy that is in addition to your homeowner’s policy.
It is not going to just protect you, but the renters policy will also protect other parties that are involved in any incident.
For E.g., if a lawsuit happens from negligence on a tenant.
If they do have renters insurance, it could possibly defend you from a opinion filed by a lawsuit, if it was issued.
It’s on top going to possibly encourage cover or would cover any losings that a renter may experience.
Due to, say, there was a fire in your property and the renters, all their individual belongings were lost out.
If you own renters insurance, the tenant is going to be covered to a considerable amount, whatever that policy is intended.
It would recoup the cost of replacing those items for those tenants.
And it would also potentially give them or cover the cost of a hotel.
So again, go back to the instance of having a fire, fire destroys a tenant’s personal property, obviously they don’t have a place to live either.
Renters insurance policy is going to let them stay at a hotel for certain amount of time.
It’s going to cover those costs, cover the cost, again, cover the cost of the personal property of the tenant.
And that’s the reason this is crucial is if this arises to a tenant of yours and they do not have renters.
At that time there’s a high feasibility that they’re not going to be able to cover the rent.
They’re not going to be able to recover the cost of replacing all their goods or be put in a hotel.
You may not be able to handle those costs as well to keep them.
And ultimately, you could potentially lose your tenant because of this.
Not to mention just the fact that you’re out of pocket trying to replace or repair your property as it was.
So, those are all reasons why it would be a good reason to require or recommend that your tenants have renters insurance here in Birmingham, Alabama.
At evernest, we don’t require renters insurance for tenants that rent properties with us.
We highly recommend that all of our tenants get it, but it’s not something that we require.
And one of the main reasons that we choose not to require tenants to have renters insurance is it’s very difficult to police.
You may make the decision as a property owner that that’s something that you’re willing to keep up with.
But if you’re requiring that your tenant is having renters insurance.
Then you need to put a process in place to make sure that you monitor beginning and end dates of your renters policy.
If you have a renter that may move into your property, you require renters insurance, January 1 they have it, that’s great.
January 1 of the following year, if that policy lapses and you’re not paying attention to it.
So, you have a fire in your property January 2nd, you don’t have renters insurance for your tenant, now you’re back to square one.
And, it’s definitely something that has positives behind it.
But you definitely need to make sure that you have a process in place to police.
So you can ensure that if you are going to require that your tenants have renters insurance, that they do have it the entire time they’re at your property.
Again, we highly recommend it, but that’s the main reason why we don’t require it.
Now, going through all the list of things of why we…good reasons to require it.
It may be worth the risk too you for people that potentially may not wanna move into your property.
Few individuals may say, “I don’t require a renter that is not prepared to spend the excess money for a renters insurance policy.”
Also most of the period, a renters insurance policy is quite low cost to the tenant.
But over and above, some individuals may not be interested in purchasing that from a renter way of thinking.
And you may lose a upcoming renter for your property.
So, need to weigh the risk there on what you wanna do, whether or not you want to require it or just highly recommended it as we do at evernest.
Again, those are just some pros for it.
And also a couple reasons why we don’t necessarily require it or reasons why you might not wanna require it either.
But at the end of the day, look into it.
See what the pros are, make sure that you make a good choice on how you want to handle your property.
How you want to handle your tenants as far as if you want to require it or to just recommend renters insurance.
Or make the decision based off the best needs for you and your investment.
So again, this is Will Morton at evernest.
Thank you for listening to short a message about requiring renters insurance in Birmingham, Alabama.
And thank you.
Have a great day.