Renter’s insurance isn’t always required, but wise renters and savvy owners rely on rental insurance policies to protect their assets, property, and investments.
What does renter’s insurance cover? Typically, renter’s insurance policies offer protection in three areas: personal property, personal liability, and temporary living expenses. Personal Property coverage is protection for personal possessions that are damaged, lost, or stolen. Personal Liability coverage protects renters after causing damage to someone else’s property or responsibility for their injuries. Temporary Living Expenses coverage is there to cover hotels or other expenses in the event renters need to re-locate during repairs or if the rental property has become inhabitable.
What is not covered by renter’s insurance?
As with all insurance policies, it is important to be well versed not only in covered incidents, but also in what is not covered. While some damages are covered under “specified perils,” these often exclude natural disasters and pests. Renter’s belongings will not be covered for things like floods nor will they be protected from things like bedbugs. Keep in mind, as well, that rental insurance will cover renter’s belongings, but not for damage to things that belong to the property owner.
Do renters need renter’s insurance?
As a renter, you may not be legally required to get renter’s insurance but ask yourself if you can afford to lose all your possessions. Are you in a financial situation that would allow you to move while replacing everything you own? Whether you rent an apartment, house, or dorm it is a good idea to protect yourself and your belongings with a renter’s insurance policy. Remember to do your homework or speak to an agent so you fully understand what is and isn’t covered under a renter’s insurance policy.
Why should owners require renter’s insurance?
If you are a landlord or rental property manager, there are a number of reasons to consider requiring renter’s insurance policies from your tenants. Adding such a requirement in your lease agreement will increase the level of protection for you, but can benefit your renters as well. Most policies are not exorbitant and many renters wrongly assume that a landlord’s insurance policy will cover their personal property.
What can a tenant do to jeopardize your property?
It goes without saying, but having renters inhabit your property invites the possibility of accidents that can cost you heaps of money or property. The chances of incidents or accidents can increase by having residents on your property. They include:
- Biohazard cleanup
- Freezing pipes
- Injury to tenants or guests
- Liability lawsuits
- Overflow of sink or tub
- Smoke damage
If these types of perils occur and your tenant has a renter’s policy, claims can be handled by their company, rather than your insurance policy. This can prevent your policy from being charged with a claim surcharge and deductible. Why should you suffer a rate increase because of renter’s negligence?
As a landlord, you can appreciate other benefits by requiring tenants to carry renter’s insurance.
- Applicant Screening – by requiring rental insurance, landlords are in effect screening applicants for those who can afford an additional monthly payment. This requirement also helps screen for renters who are interested in protecting their belongings and taking responsibility for their end of the liability of renting.
- Lawsuit Mitigation – renter’s insurance can help owners avoid court by keeping their insurance out of the equation in the event of an injury or property damage.
- Reduce Relocation Responsibilities – When you encounter repairs that require temporary housing for your tenants, the renters’ insurance policy is responsible for covering a relocation.
As a landlord, there is already a litany of details you need to be dealing with. Knowing that your tenants are covered with their own renter’s insurance policy can give you peace of mind. You won’t be stuck covering exorbitant costs caused by damage or – worse – finding yourself facing lawsuits for issues that were out of your control.
Renter’s insurance is the right choice.
Whether you are a renter or a property manager, a strong renter’s insurance policy is worth the cost to cover your possessions or protect your investment.
If you are looking for more details about renter’s insurance or to get a quote, contact our office: