Renters insurance is an investment a renter makes in DC rentals when they decide to call them 'home!' It's not designed outright to provide you, as the investment property owner, with any protection.
However, it is one of the most important things you can encourage—and even require—your renters to carry. Preventative maintenance might keep your residential property in top shape—but it certainly can't prevent every type of disaster that might befall your DC-area real estate!
With that in mind, if you happen to be working with an expert DC property management team, they've likely already encouraged you to implement renters insurance requirements to safeguard your renters. It is an important part of your real estate investment strategy, and if you haven't yet done so, today's article is for you!
Note: This blog post does not act as a substitute for legal counsel. When in doubt, consult with your trusted attorney or Renters Warehouse DC/NOVA for real-time assistance concerning your investment property.
Can You Legally Require Renters Insurance in DC?
As DC.gov states, there are no federal laws that require a person to carry renters insurance. There are also no laws that say you cannot require it of your residents.
In fact, the district encourages property owners and renters alike to get coverage because it is such an affordable way to protect an estate! Typically, a DC property management company will often include this type of requirement in the property listing and mention it again during the screening process. That's how important it is to you as the property owner.
To avoid any potential litigation or complaints, property management groups highly recommend making renters insurance a mandatory component of your lease agreement. This ensures your renters are aware of the requirement when they sign, and it also makes the need to have coverage legally binding.
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It Does Not Cost You Anything
One of the key points to remember about renters insurance is that you do not bear the cost as a property owner. This is a policy your renters choose based on their needs. They control how much they buy and the type of coverage they invest in.
According to some reports, the average cost of renters insurance is about $242 a year, which is just over $20 a month. This makes it a very affordable investment for most renters. It helps you to understand these costs if you're an investor who isn't working with DC property management services in case this becomes a point of contention for prospective renters. They may not be aware of just how affordable coverage can be!
The Benefits of Renters Insurance for Renters
Another way to look at this is to note the benefits of having renters insurance. Policies cover varying degrees of one's personal belongings as well as medical liability in the event of an injury. While it does not protect your single-family or multi-family rental property, the benefits of such coverage are numerous.
- It helps replace stolen items: This means your renter does not have to worry about costly stolen items being too challenging to replace.
- In case of disaster, the policy covers their belongings: Your investment property insurance policy does not protect renters' assets. The cost to replace belongings can be high—especially if they lose everything.
- It can help cover the cost of liability risks they are responsible for: Imagine a guest slips and falls while visiting one of your renters! It's important for your residents to have a buffer against medical claims.
Renters insurance may seem like an unnecessary burden or expense—but it is an important part of any successful residential property in the DC area! You protect your property with a thorough tenant screening: you should also be protecting it through renters insurance.
How Does Renters Insurance Benefit You?
There are many reasons to consider this type of requirement. It is like having a crisis plan in place for your renters: they just may not see the benefits that they get from it until the time comes to call on their coverage!
There are also practical reasons for requiring renters insurance as a property owner. For example, it may help to reduce the risk of a lawsuit. Your property insurance policy does not usually cover the losses that your renters suffer in some events. Yet, they may still try to force your hand to pay for some of these losses in the event of a tragedy. Mitigating that risk is always an important step.
There's another added benefit of coverage: Dog bite liability claims can be costly. You may want to reduce the risk of your renters coming after you for allowing a dog on your property that bites another person if you own any multi-family DC rentals.
To prevent this from becoming a reality in the first place, you should always be screening the pets you place into any property along with your new residents. However, if you lack access to such tools, you can always turn to a DC property management group to manage this for you.
Your Property Manager Provides More Than Support!
When working with a property management expert, you'll gain more than access to insight and support concerning renters insurance. These skilled professionals can also help ensure there are no legal missteps during the process. They can even do the work for you when it comes to crafting an airtight lease agreement!
Working with a skilled DC property management company is one of the best ways to sustainably and safely grow your portfolio in the DC area. Interested in learning more? Download your copy of our free resource, Real Estate Investing: Grow Your Portfolio!