Renters Insurance Is It really important to your maintenance budget?

So I was wondering how important is renters insurance to the property maintenance budget? I know we tell our residents that they should have renters insurance for their items but is it really important to us as far as our maintenance budgets? I would think it would be extremely important but I have never handle a budget or been shown what goes into one, which is why I'm really excited to take the CAM because at least there I will learn. If the maintenance budget is blown away by resident "accidents" why are we not educating our residents more and maybe educating the maintenance team more about the benefits of renters insurance. Can you submit a claim for a water extraction, burner counter top, or a hole in the dry wall? If you do submit a claim and it works will your budget face being cut even more the following year because you are not using the "emergency maintenance funds" sense you have been submitting your claims to renters insurance? I would love some feedback on this, just curious!
Jolene Sopalski
Assistant Community Manager
Finlay Management.Inc

Great question. Let me first say renters insurance should never be thought of (at least in my opinion) as a subsidy to maintenance in your budget. I do however believe it can be beneficial in several areas. Some policies do cover the damages you mentioned, but the primary reason for the insurance is far beyond the maintenance budget. Also remember that many policies exclude these damages or have deductibles which would take you right back to the renter as having to pay.

First, should they leave a pot on the stove or leave a candle lit and go to sleep etc., this protects the renter and the landlord. It protects the renter related to the accident/negligence, and it protects the landlord from significant deductibles and other costs in rebuilding the property and keeps their insurance rates lower if it is required. This does have an impact on cash flow and the bottom line of the asset and dealing with restoration due to a major loss may not be all covered by the landlord insurance (and definitely does not cover the resident). Second, it can protect the residents personal property. If you have ever had to deal with a significant fire or catastrophic loss and watched your residents wondering around the property in a haze because they have just lost everything and have no idea where to turn, this provides peace of mind for them.

My experience is you could not count on occasional funds with the mentioned losses, and more than likely your deposit is for this type of damage. Requiring renters insurance is like many areas in our business, it is becoming commonplace. Site personnel went crazy when we many years ago started charging for water and sewer, which today is part of renting an apartment. Then we started charging for trash, which today again is common. Requiring renters insurance is becoming more the norm, and is of benefit to not only the landlord...but more importantly to the resident. That being said, I would suggest it should not be considered in the maintenance budget.