Far too many apartment leases today fail to include a stipulation that can protect landlords from significant financial liabilities: a clause that requires tenants have renters insurance prior to occupancy, according to a new white paper issued by Chicago-based Parr Insurance Brokerage.
Titled “The Crucial Missing Clause in Apartment Leases? Mandate for Renters Insurance,” the white paper, written by Melissa Neis, vice president at Parr Insurance Brokerage, describes the financial burdens landlords may encounter when tenants are uninsured, citing factors such as higher premiums, legal issues, repair expenses and the potential for rent delinquencies.
The article notes reasons why landlords resist making this mandate, such as tracking renters insurance policies to ensure they remain in place, and describes new developments in the insurance industry to combat such obstacles. One concept features new software programs that provide landlords real-time access to tenants’ policies and expedites the purchasing process for renters.
The white paper also covers legal issues pertinent to making renters insurance a requirement.
The white paper is available for free online on the Parr website.