Do you require your tenants to carry renters insurance in your lease? Do you enforce it? Your tenants can go out in the open insurance market and purchase an annual renters insurance policy by paying a couple months of premium upfront. So what happens when money is tight and they fail to make their monthly renters insurance payment? Unless you are listed as Additional Interest on their coverage or you follow up with their insurance agent monthly to confirm their coverage is in good standing, you’ll have no way of knowing when their coverage lapses. It will never fail, the tenant-caused loss that damages your property will almost always happen when their coverage has lapsed.
In an effort to minimize your exposure and simplify your insurance processes, we’ve developed our NREIG Tenant Protector Plan®. This is our cost-effective way to offer an alternative to renters insurance. We do this by working directly with you to secure the coverage, guaranteeing the coverage is in force when you need it. For substantially less than what a renters policy would cost your tenant to purchase on their own, we can include the Tenant Protector Plan on some or all of your occupied locations.
So what does our Tenant Protector Plan coverage provide?
A limit of liability for “tenant-caused” negligent losses, which unfortunately account for more than half of property losses the commercial insurance industry experiences. Consider your tenant who starts cooking and falls asleep, only to burn your kitchen down, or the tenant who leaves a candle burning when they go to bed and it burns out your living room. Your property insurance company will step in and make you whole again, but in doing so may decide to increase your insurance costs over time (in an attempt to recover some or all the funds paid to repair your home after the fire, regardless if you’ve done nothing wrong). Engaging in our Tenant Protector Plan can transfer the responsibility for these losses to the negligent party, and will reimburse your property carrier (up to your limit of liability) for what they paid out for these “tenant-caused” losses. This goes a long way in helping to manage your loss history, avoid cost increases, and stabilize your property rates over time.
Also included is a $10,000 sublimit of coverage for your tenant’s contents. Consider a lightning strike to one of your investment properties that burns the house down, leaving your tenants displaced. Your property coverage does not provide any coverage for your tenant’s personal belongings, they must have a renters policy to have coverage for their lost items. This included sublimit will help them start over, and to replace at least some of what they’ve lost.
Our Tenant Protector Plan also includes a $2,500 contents sublimit for non-negligent affected tenants. Think about the fourplex you own, you get a call that tenant A left the stove on, fell asleep, and caused a kitchen fire. The fire department was called to put out the blaze, but in doing so caused water damage to units B, C, and D (not to mention the smoke damage suffered to each of these units). This sublimit would pay tenants B, C, and D $2,500 respectively to replace their damaged belongings. (This coverage carries a maximum of $7,500 per occurrence.)
Another unique coverage under the Tenant Protector Plan is the $1,000 sublimit for Skip Rent. Many of you have had a tenant that has skipped out on you midway through their lease, right? While you’re scrambling to find another tenant to replace that rental income, wouldn’t it be nice to know you have insurance coverage that would reimburse you for at least some of that lost rental income (up to $1,000)? This coverage can also be triggered by other types of unexpected vacancies like eviction, military deployment, and untimely death. NREIG is proud to say we are one of the very few that can offer this type of coverage to you.
If the Tenant Protector Plan sounds like it’s for you, please contact your Client Service Advisor to inquire about adding this to your occupied rental portfolio.
Have additional questions? Learn more here.
Note: This piece is not to be construed as contractual. Applicable language specific to your policy supersedes it. Information contained in this post is intended to provide you with a brief overview of the coverages provided for reference purposes only. It is not intended to provide you with all policy exclusions, limitations, and conditions.