Renters Insurance: There's a Better Way

Understanding Renters Insurance

While renters insurance is not required by law in most states, some landlords may require and offer tenants coverage to live in their building or to store property in their storage units.

From the renters' or insured's perspective, it's generally a good idea to have at least some form of coverage as the landlord's insurance is not liable for any damage to the insured's personal property. So in the event of a fire, accident, or burglary the insured would be responsible for replacing their belongings.

In short, renters insurance covers what a renter owns. Most landlords' insurance covers only the building and damages due to negligence. Coverage for some of the most common causes of property damage and loss, such as theft, vandalism and fire, is entirely up to the renter. Without renters insurance, a renter may have to bear the financial burden of a loss on their own.

What Does $10 a Month Cover?

$10 a month protects the insured's properties up to the policy limits, usually personal property coverage of $30,000 and personal liability coverage of $100,000. Renters typically have more "stuff" than they realize as the cumulative value is often worth thousands or tens of thousands (electronics, furniture, clothing, etc.).

The Opportunity for Property Owners

As the property owner, not only do you own the unit, you can and should own your own insurance company. As the insurer, premiums now become profit. Premiums paid by your operating company to insure your valuable properties. Typical property exposures such as earthquake, mold, termites, bedbug as well as general liability difference in conditions, administrative actions, theft, employee practices and more.

Create a Profit Center

And premiums paid by your tenants for coverage of their property. No one blinks at $10 per month requirement to protect their belongings. This is the typical charge required by landlords of properties, both rental units as well as storage units.

How many units do you own? 2,000 units = $200,000. 5,000 units = $500,000, and so on.

As the insurer, you can now offer coverage to your tenants, providing coverage which they need. Coverage which requires premiums to bind. Premiums which your insurance company utilizes to provide coverage, reserve for claims, and pay out claims. Insurance companies are created to be profitable. Turn premiums into profit.

There's a better way to risk management. Captive insurance is the better way.