Do your investor clients require tenants to carry a renters insurance policy? What investors may not know is that any tenant can go out into the open insurance market and purchase an annual renters insurance policy by paying a couple months of premium upfront. But what happens when money is tight, and the tenant fails to make their monthly insurance payment? Unless the investor is listed as Additional Interest on the tenant’s policy, or they check with the insurance agent monthly to confirm coverage is in good standing, investors have no way of knowing if/when coverage lapses. It never fails, the tenant-caused loss that damages the property will always happen when the tenant no longer has coverage.
To minimize your investor clients’ exposure and simplify their insurance processes, REInsurePro developed the Tenant Protector Plan® (TPP). This is our cost-effective way of offering an alternative to renters insurance. We do this by working directly with you and your clients to secure coverage, guaranteeing the policy is in force when the investor needs it. For substantially less than what a renters policy would cost a tenant to purchase on their own, we can include the Tenant Protector Plan® on some or all occupied locations in an investor’s portfolio.
What coverage does the Tenant Protector Plan® provide?
The Tenant Protector Plan® is available in two options: TPP, the full coverage plan that includes Tenant Liability, Sewer & Drain Backup, Contents, and Skip Rent; and TPPx, which provides Tenant Liability coverage only.
Limit of Liability for Tenant-Cause Negligent Losses
Unfortunately, these types of losses account for more than half of property losses in the commercial insurance industry. Consider a tenant who starts cooking something in the oven but falls asleep, resulting in a kitchen fire. Or a tenant who forgets to blow out the candle they lit before going to bed, causing a disastrous living room fire that spreads to other areas of the house. The investor’s property insurance will step in and make them whole again, but in doing so, may decide to increase their insurance costs over time, although the property owner has done nothing wrong. Our Tenant Protector Plan® transfers the responsibility for these losses to the negligent party and reimburses the investor’s property carrier (up to their limit of liability) for what they paid out for these tenant-caused losses. This goes a long way in helping to manage loss history, avoid cost increases, and stabilize property insurance rates over time. Covered causes of loss include Fire, Explosion, and Smoke.
Contents Coverage
The Tenant Protector Plan® also includes a $10,000 sublimit for the tenant’s contents. Imagine lightning strikes one of your clients’ investment properties, causing a house fire that burns two rooms and everything in them. Their property coverage does not provide any coverage for the tenant’s personal belongings (e.g., furniture, clothing, etc.), they must have a renters policy to have coverage for their lost items. This included sublimit will help tenants replace those lost items.
This also includes a $2,500 contents sublimit for non-negligent tenants. Let’s say the investor owns a fourplex, they 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 fire, but in doing so, caused water damage to units B and C. This sublimit would pay tenants B and C to replace their damaged belongings. (This coverage carries a $7,500 aggregate limit per loss)
Covered causes of loss for Contents Coverage includes Fire, Explosion, Smoke, Sewer & Drain Backup, and Wind/Hail.
Skip Rent Coverage
The Tenant Protector Plan® provides a $1,000 sublimit for Skip Rent. It is not uncommon for investors to have a tenant skip out on them midway through the lease. While they’re scrambling to find another tenant to replace that rental income, the Tenant Protector Plan® has coverage that would reimburse the investor for at least some of that lost rental income. This coverage may also be triggered by other types of unexpected vacancies like finalized eviction, military deployment, and untimely death.
The Tenant Protector Plan® is available as a standalone option or as an add-on to your clients’ existing policy.
