Why do your renters need insurance?
I’ll never forget the story of my mother-in-law’s best friend. She was up in Ringgold when that tornado hit in 2011. She lived in a single-story apartment complex with easy access to town and the interstate. This was fantastic for her because she got lots of convenience without having to worry with any home or yard maintenance.
She was on the phone with her daughter as the tornado was approaching. She raced for the bathroom and jumped into the tub just in time for the ceilings to collapse all around her as the tornado literally jumped her building.
I can’t even begin to imagine how scary that was.
EMS ushered her out of the area shortly thereafter. The reason for this was the region looked like the war scene from “Saving Private Ryan” where Vin Diesel gets shot by the sniper when he’s trying to save the little girl.
There were buildings half standing, others half missing and still others that were just gone — strewn all over the landscapes.
When my mother-in-law’s best friend was finally allowed back in the area, she found that her building had been condemned. She wasn’t allowed to get any of her belongings because of this fact. It wouldn’t have mattered anyway. When the ceiling fell, the blown-in insulation had coagulated into a nasty, itchy and dirty mush atop all surfaces.
Everything was ruined. There was nothing left to save.
This is the story I tell all our tenants when we go to sign the lease in a process we call a “lease up.” During this process we read the entire lease together and answer any questions the tenants may have.
Our lease has one section that lets the tenant know we don’t insure any of their belongings. The reason for this is that a landlord insurance policy only covers the structure of the property. It does not cover any of the contents of the house.
It’s at this time that we strongly suggest they look into a renter policy, which is meant to cover all of their possessions. So, if a fire, tornado or any other catastrophe hits, and it’s a total loss, they won’t have to start over from scratch with nothing to show for it.
You would be surprised how many of our tenants have never heard of a renter policy. We had some folks who recently fell into that category. But they found out the hard way. They were in a storm where straight line winds, or possibly a microburst, caused a tree to fall on their vehicle and take the roof off the rental property they were asleep in, all in one fell swoop.
The wife said she wished she had known about renter’s insurance because they would have had it. They’d just didn’t know it existed. And now they’ve lost everything.
This is not the first time we have heard this. I remember a fire victim expressing the same sentiment. And we’ve had tons of tenants that haven’t lost anything yet but were unaware that renter insurance existed.
We always let them know that a renter’s policy is really cheap — like less than $25 a month in most cases. I always smile and say that you can’t even go to Zaxby’s for that. And they always shake their heads in agreement.
I know some landlords who require renter insurance for a tenant to be in good standing. I am not prepared to do that yet, but it’s not a bad idea. It protects them and probably gives you a little bit more liability coverage. I’m just not ready to micromanage that process yet.
But in the wake of what just happened in Chattanooga, Chatsworth and the storm damage that we saw down in Carterville, you should really make your tenants aware of what a renter’s policy is and why they should have one. You could also touch base with your insurance provider and see if they can cut your people a deal. But like I said, it’s cheap. And I would hate to see my people having to start all the way over with nothing to show for it when they could have been protected for the cost of one fast food outing a month.
Joe and Ashley English buy houses and mobile homes in Northwest Georgia. For more information or to ask a question, go to www.cashflowwithjoe.com or call Joe at 678-986-6813.