The benefits of having insurance are clear!
By Susan Saldibar
Accidents happen. Here’s one that most of us can recognize – a resident turns a faucet on, forgets that the water is running, and heads to dinner. The sink overflows, damaging her apartment and belongings and the apartment below her! With renter’s insurance, her family doesn’t have to worry about the costs associated with replacing her personal belongings (assuming personal property coverage has been purchased) and having to foot the bill for a place for her to temporarily live if the apartment is deemed “unlivable.”
But here’s the point. When residents don’t have insurance, you, as the property owner, get hit as well. High deductibles do little to offset the expense of a claim. And while, you may not hold legal responsibility, disasters that end up costing your residents time, money and heartache tend to get passed around. And they can tarnish your reputation.
Renters insurance or, in this case, “resident’s insurance” is a concept that is often misunderstood. To give this important topic some badly needed clarity, I reached out to Jay Stoltz, the knowledgeable (and very helpful) Director of Market Development for RealPage’s LeasingDesk Renters Insurance subsidiary. RealPage is a Senior Housing Forum partner. If you want to know about residents insurance, Jay’s the perfect resource.
As it turns out, there are a lot of great things about getting residents on board with insurance. Not only for the resident, but potentially for your commercial insurance as well.
Removing the worry and panic factors
For residents, the benefits of having insurance are clear. They can protect themselves and their belongings for burglary, fire, water and explosions; all of which we know happen more frequently than we like to admit. And there are other liabilities.
“It’s not uncommon for a resident’s family to bring in the family dog for a visit,” says Jay. “What often happens is that other residents want to see the pet, or it just gets loose. That’s a living, breathing liability to the resident, in the event that dog bites or injures another resident or staff member,” he notes.
Taking some of the burden off your already expensive commercial policies
As Jay points out, “Typically owners of senior living communities carry huge commercial insurance premiums. When residents have their own insurance, it shifts some of the burden from the owner. That can help you avoid paying that large commercial insurance deductible.” As Jay points out taking some of the burden off of you may enable you to raise your deductible and lower your premium.
Setting straight the two top misconceptions about residents insurance
It’s too expensive for my residents
What’s “too expensive”? Typically renter’s insurance costs between $11/month and about $20/month depending on how much deductible the resident opts for. Typically that would cover up to $100k of liability and $50k for personal contents. Compared to, say $4,000 monthly rent, that’s very little – less than 1 percent. Wouldn’t that resident who left the bath water running have preferred to pay $15 per month, rather than the thousands of dollars in damages she may be responsible and held accountable for?
It’s a hassle to implement
This is an argument that baffles Jay. While he can only speak for LeasingDesk, he notes how easy it is to engage residents in getting insurance. “In our case, we do all the heavy lifting,” says Jay. “Basically, the leasing representative points out the liability requirement in the lease to the resident. Then, the leasing agent simply offers a brochure, giving the resident the choice of either calling or going online for a quote. LeasingDesk does not want the leasing associate to act as a sales person, or insurance representative. That’s the duty of our licensed representatives,” Jay points out. Once that’s done the insurance provider, in this case it would be LeasingDesk, handles everything.
“And if the residents have questions, LeasingDesk can answers those questions on the phone instantly,” Jay notes. “They can even get same day coverage,” he adds. Their policy is drafted, and emailed to the resident. Seamless. “It’s a turnkey process. There is even a back office website where staff can go on and see who has enrolled, who has cancelled, etc.”
Why now is the time to get on board with renter’s insurance
Today, 84 percent of apartment companies require residents to buy renter’s insurance, according to the National Multi Housing Council’s 2012 Apartment Cost Risk Survey. That’s up sharply from 62 percent in 2011. Could it become mandatory for all building managers, even senior living communities? “It absolutely will not surprise me if this becomes mandated within the next three to five years,” says Jay. “The risks to go without a liability mandate continue to rise as do the costs to insurance companies and owners,” he adds.
“Renter’s insurance for residents of senior living communities is a concept whose time has come,” says Jay. “And instead of looking at it as a necessary evil, smart owners are starting to recognize it as the win-win it truly is.”
To get more details from LeasingDesk about resident insurance, please visit RealPage – Renters Insurance.