Renter insurance becomes a requirement for some tenants


Darlene Jenkins-Armour has lived at Willow Trace Apartments in Shreveport for seven years.

There and at other apartment communities that she’s lived in, she’s paid renter insurance premiums to cover her personal property should anything have happened.

Before, insurance coverage had been an option, but when Jenkins-Armour, 51, renews her lease on Nov. 1, she will pay a higher insurance rate in addition to a $17 rent increase during her next lease cycle.

That’s because Willow Trace joined its sister properties nationwide Sept. 4 in requiring new residents and residents who chose to renew their leases to obtain a minimum of $100,000 in liability insurance coverage.

“I’m stuck,” Jenkins-Armour said. “We’re paying more, but what are we paying for?”

Willow Trace, a property of Memphis, Tenn.-based CLK Multifamily Management, is among landlords nationwide who are beginning to force tenants to obtain liability insurance policies as a safeguard against potential damages such as overflowed toilets or negligent fire damage.

CLK, which owns multiple properties in several states, including Kingston Village in Shreveport, gave its tenants an option to obtain insurance through First American Property & Casualty Insurance Co. or seek out their own carrier.

The $100,000 in coverage does not include an amount for person property coverage and Willow Trace Property Manager Diana McClure did not know how CLK came up with the minimum $100,000 figure but did say that the requirement actually is a benefit to renters.

“Some residents tend to get upset, but really, the insurance is for them to protect themselves,” she said. “There are a lot of things that we’re not responsible for.”

As a part of the requirement, residents must present declaration letters to property management as proof of insurance. If not, their only recourse is to move, McClure said.

Though Willow Trace and Kingston Village are among the first properties to implement the requirement locally, eventually the requirement will be mandatory at more properties, McClure said.

Willow Trace has 192 units that are made up of apartments and townhomes and about 96 percent of the units are occupied, McClure said. Prior to the requirement, about 40 percent of Willow Trace residents already had renters insurance, she added.

Apartment owners have insurance policies that cover building structures on their properties for some damages, but those policies don’t cover damages caused by tenants, which are commonly outlined in lease agreements.

According to the Insurance Information Institute, a 2006 Insurance Research poll found that while 96 percent of homeowners had homeowners insurance, only 43 percent of renters had renters insurance, despite the fact that rented households are burglarized at rates about 50 percent higher than owned households.

Louisiana is the fifth highest state for renters insurance premiums. The average premium for Louisiana renters in 2004 was $253 compared to a national average of $195 in 2004, according to the institute.

Though the trend of requiring tenants to obtain renter insurance is growing, it hasn’t picked up much steam in the Shreveport-Bossier City area, according to Kimberly Booker, association executive for the Shreveport-Bossier Apartment Association.

“This area is a little delayed, such as when it comes to properties that are now starting to charge for water,” said Booker, who also is the property manager at Aspen Apartments in Shreveport.

Aspen Apartments, owned by Shreveport-based Fairfield Group, is among local companies now turning water and sewer bills over to renters — which is the newest trend, she said.

Apartment properties in the Shreveport-Bossier City area have become a part of the trend within the past nine months, Booker said, as about a fourth of local apartment association members now charge residents for water and sewer.

The Shreveport-Bossier Apartment Association does not keep a record of what requirements each company implements, however members often recognize trends in the industry among local members and by looking at neighboring states, such as Texas. There, tenants are required to pay those costs statewide.

“An increase in costs is the main thing,” Booker said. “Also by charging for water, residents now are bringing leaks to our attention. If they have to pay for it, they call us about it, which, in the long run, prevents problems.”

Though St. Charles Place in Bossier City does not require all tenants to obtain renter insurance, it does have residents sign documents to acknowledge that they’ve been made aware of their financial liabilities in the event that they cause property damage, said Lisa Burns, property manager and Shreveport-Bossier Apartment Association president.

St. Charles Place, owned by Dallas-based BH Management Services Inc., only requires renters with satellite dishes to obtain liability insurance policies of $25,000, but the company also encourages renters to obtain insurance policies.

“Insurance is always a good idea because you never know if a fire or other disaster will come through,” Burns said. “Renters are responsible for damages to their apartment and their neighbor’s apartment as well.”

Though rates for water and sewer often are determined by the number of occupants and each apartment unit’s square footage, when it comes to renters insurance, companies may consider a number of factors in determining the amount of liability coverage required of its tenants.

Despite the low number of local properties requiring renters insurance, Burns and Booker both said renters should expect more companies to change their ways in the future.

“The association loves to see the requirements put in place because it’s wise for renters to have insurance, in my opinion,” Booker said. “But with the cost of living going up, and as we start changing to include the cost for water, we can’t hit residents all at once.”

But it’s the “all at once” that is Jenkins-Armour’s greatest concern. Especially as she’ll pay increased premiums for $100,000 in liability coverage.

Before she retires from General Motors in three years and returns north, Jenkins-Armour intends to live at Willow Trace where she will face two more rent increases in addition to her increased insurance coverage, she said. The additional insurance cost also is difficult for some of her neighbors who have fixed incomes, she said.

“What happens when you can’t replace your personal items, but the building is protected,” she said. “It’s not fair.”

In the end, as long as tenants are responsible for property damage, renters insurance will continue to be a good option, Booker said.

“There are residents that live carefully, that don’t do things like leave a candle burning, but they don’t know how the neighbors surrounding them live,” she said. “We’re limited on control. That’s why we highly recommend that residents get insurance to cover their personal belongings.”

By Tarah Holland, The Shreveport Times


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