The Importance of Tenant Insurance in DeKalb County: Protecting Your Investment - Article Banner

When you’re focused on protecting your real estate investment in DeKalb County, there are some important steps you can take to mitigate any future catastrophes. You’ll screen tenants carefully. You’ll sign a strong lease. You’ll respond immediately to maintenance issues and conduct routine inspections. 

Another important measure is insurance. 

You want to make sure you’re fully insured. 

You also want to make sure your tenant is fully insured. Tenant insurance protects your investment by safeguarding your tenant’s personal property against any damages or losses that might occur at the rental home

Without tenant insurance, you run the risk of dealing with an angry tenant who does not understand why their personal possessions were not covered during a flood, fire, or other covered event. You can also protect yourself by ensuring that your tenant has adequate liability coverage. If something goes wrong at your property and it’s a problem that they cause, you won’t have to worry about paying for repairs or replacements out of your own pocket. 

You can require your tenants to buy renter’s insurance before they move into your property. Write that into the lease agreement so tenants understand the expectations. 

Let’s explore the benefits of tenant insurance, which is also called renter’s insurance, and why it’s so important in protecting your property. 

Understanding Renter’s Insurance and What it Covers 

Renter’s insurance will typically provide liability coverage, protection for a tenant’s personal belongings, and sometimes coverage for additional living expenses in case the rental property becomes temporarily uninhabitable and the tenant needs to move out for a period of time. 

Tenants in DeKalb County often assume that their landlord’s insurance would cover any damage that’s done to their property during a covered loss. 

This is not true, and your tenants need to understand the limits of your own coverage. A landlord’s policy will cover the physical structure of the property and any of your own possessions, such as appliances. Tenants will be left uncovered if they don’t have their own insurance. A landlord’s policy does not cover the personal belongings of a tenant. Electronics, clothing, small appliances like toasters, and coffee makers would not be covered. If something happened and those things were damaged, a tenant without insurance would have no way to repair or replace their belongings. 

In any rental property, accidents can and will happen. If there’s damage done to a renter’s possessions or someone gets hurt while they’re visiting your tenant, renter’s insurance can reduce the overall risk and cost that both you and your tenant may incur. 

Renter’s insurance is a type of coverage that’s available to all renters, whether they’re leasing a single-family home or a unit in an apartment building. 

The most important benefit to most tenants who purchase renter’s insurance is the coverage provided for their personal property. If there’s a sudden leak and the home has a couple of inches of standing water, there could be damage to furniture, electronics, clothing, and other items. 

The renter’s insurance policy will cover the cost to replace or repair those items. Residents need a renter’s policy to make sure they don’t suffer a major loss if something happens at the home. 

The renter’s policy will also cover liability. If a tenant accidentally leaves a pot on a hot stove and a fire starts in the kitchen, the renter’s insurance will cover the required repairs. This will save the tenant from a lot of out-of-pocket expenses, protect his or her security deposit, and provide some relief to the landlord. It also helps with expenses. If the fire does enough damage that your tenants have to move into a hotel for a few days while the property is repaired, it’s better for their insurance to cover the cost than your own. Everyone is afforded some extra peace of mind when a renter’s insurance policy is in place. 

Communicating Insurance Requirements to Tenants 

This should not be a hard sell when you’re talking to tenants about the insurance requirement. You’ll want to let tenants know that renter’s insurance is required before they sign the lease agreement. In fact, the insurance requirement should be in your lease agreement. If tenants are confused about why they need this, explain that it’s for their own protection. They’ll be protected against the potential for liability during a situation in which your property is damaged. They’ll also repair or replace any personal belongings that are damaged or destroyed during a covered loss. 

Sometimes, there is also coverage available for additional living expenses in case the rental property becomes temporarily uninhabitable. Damage may occur that’s accidental, but if someone gets hurt or something needs to be replaced, the insurance a tenant holds can reduce their risk. 

Tenants will likely be surprised at how inexpensive renter’s insurance is. They will usually pay less than $20 a month to cover themselves. In some cases, they can bundle their renter’s insurance with an auto policy to keep costs even lower. 

Make sure you are listed as an additional insured as the landlord. This will protect everyone under one policy and ensure that you are notified if coverage lapses or changes.

When your tenants are preparing to move into your property, you want to make sure you’re setting them up for success and providing a safe, habitable and attractive home. You want to be sure they’re having a good experience while living in your home so you can count on on-time rental payments, attention to the lease agreement, and help with maintenance. 

You also want them to understand their responsibilities and your expectations. 

Tenant insurance needs to be a non-negotiable. You’re not asking much by requiring them to have a policy in place before they move in. In fact, you’re helping them protect themselves and their physical property. 

If you need some help with insurance or with your tenants, please don’t hesitate to contact us at Silas Frazier Realty with any questions. 

Property Management CompanySilas Frazier Realty serves rental property owners in Atlanta, Snellville, Stone Mountain, Lilburn, Conyers, Smyrna, Marietta, Lithonia, Jonesboro, McDonough, Vinings, Brookhaven, and Tucker.