As a tenant, buying renters insurance is one of those level-up moments in life.
But renters insurance is more than a minor expense for tenants; it can also be a lifesaver for property managers when accidents happen. We asked Sean Burgess, Chief Claims Officer at Lemonade, to talk us through some of the common misconceptions about renters insurance and why more property managers should encourage tenants to sign up for a policy today.
Myth: Renters insurance only benefits the tenant
Fact: renters insurance has plenty of advantages for property managers and building owners as well.
“It’ll help protect the tenant,” says Burgess, “but in turn it makes things easier and less complex for the property manager.”
When tenants are protected from covered perils like water damage to property or a slip and fall on the steps, landlords are less likely to face lawsuits.
Additionally, a renters insurance requirement can minimize the financial fallout from a negligent tenant.
“Maybe it’s a fire that may occur because the tenant is not adhering to some of the policies,” explains Burgess. “Whether it’s smoking in an apartment building or leaving pizza boxes on top of the stove, or maybe it’s not maintaining your water resources properly and having an overflow in a tub or a sink.”
In those cases, the tenant’s actions could damage the building’s structure or harm the contents of neighboring units. Renters insurance can help cover the cost of cleaning up the mess a tenant inadvertently creates.
That’s especially important given that property managers might not realize that a tenant isn’t following safe practices until a mishap has already taken place.
“That tenant negligence that you may not know about that’s occurring in a unit,” says Burgess, “you get that extra protection from it if the tenant has a renters policy attached to their individual unit.”
Myth: Landlord’s insurance makes renters insurance unnecessary
Fact: renters insurance is a crucial piece of protection for landlords as well as tenants.
To prepare for incidents where a tenant might be liable, it’s best to require renters insurance as a first line of defense. Policies typically include at least $100,000 in liability coverage, so you can rely on a significant level of protection before a landlord’s policy kicks in.
“You want to have that extra layer of protection before you have to go to your landlord policy,” says Burgess. “Require your tenants to have a level of accountability and responsibility through this coverage that applies before you even have to use that landlord policy that you have in place.”
Requiring renters insurance can even give the property manager a wider selection of potential tenants. For example, thanks to renters insurance generally covering tenants’ liability if their pet nips or scratches someone else on the premises, property managers can welcome pets without fear of legal battles if an animal gets into an altercation with others.
“Renters insurance can help mitigate that risk and make a pet-friendly environment actually better for the property manager,” says Burgess.
Myth: renters insurance is a pointless financial burden for tenants
Fact: renters insurance not only protects tenants from potentially devastating financial consequences, but it can protect the landlord’s cash flow.
Lemonade’s renters insurance premiums start at just $5 a month, and a policy protects against events like theft or lawsuits.
“Having renters insurance helps protect the financial security of tenants, which directly impacts the property managers,” explains Burgess. “If they have renters insurance, then that stuff is quickly and easily replaced and they’re compensated, which just makes it more likely that rent’s going to be paid on time, that there’s not going to be a financial hardship for that tenant that then bleeds over into the property manager’s business.”
Myth: applying for renters insurance and filing claims has to be difficult and time-consuming
Fact: Lemonade’s AI-powered application and claims processes make dealing with a policy a breeze.
“The policy can be acquired in 90 seconds or less on the app quickly, efficiently, and easily, so it’s not cumbersome for the tenant to get the policy,” Burgess says. “And the way Lemonade leans into technology, its speed and ease with a lot of empathy along with it, makes the claims process pretty simple.”
After a customer files a claim through the Lemonade app, it’s analyzed by AI. The app approves about 40% of claims instantly and hands the remainder over to a human team. Thanks to the expeditious claims process, tenants are able to replace damaged items or get bills taken care of promptly, which reduces the chance they’ll enter into disputes with the landlord over the incident.
Speedy claims resolution also allows property managers to restore affected units as soon as possible, minimizing the time that units are out of order after an incident.
“Quickly receiving a policy, making it wildly affordable and having a claims process that is automated and seamless all make Lemonade the right choice for a property manager,” says Burgess. “It improves the relationship between the tenant and the property owner.”
To learn more about Lemonade’s cutting-edge insurance platform, visit their website.