What is Renter’s Insurance?
Renter’s insurance is a self-descriptive term – it is an insurance policy that protects the interests of someone renting a living space and/or a commercial space for business.
What Does It Cover?
Probably the most common reason renters fail to obtain insurance is because they believe the landlord’s insurance will cover them. This is true to a certain extent. The landlord’s policy covers the building. It does not, however, protect the renter from theft or damage to personal property, nor does it protect you from liability. If someone was injured within your unit (house, apartment, condo, etc.), they could bring a lawsuit against you personally. When it comes to belongings, you may believe you do not own very much, but imagine what would happen if ALL your personal items were suddenly ruined by a fire or flood? Think through everything you would have to replace: clothes, some type of furniture, jewelry, jackets, shoes, a wallet or purse, etc. These small items add up FAST! Most people are shocked when they move into their first place because they did not think about all the ancillary costs like a mop, dishwasher soap, cleaning supplies, tools, etc.
How Much Does It Cost?
Like any other major purchase, it is important to get a few different quotes and compare them. Renters are often surprised by how little their monthly bill is and how much the policy covers. It is a very worthwhile investment!
What are the Benefits for the Landlord?
Not only do tenants receive protection through this policy, but it also benefits the landlord in several ways. Tenants are less likely to bring a lawsuit against the building owner for destruction of personal property. What if the apartment flooded because of a pipe burst or some other structural malfunction? A tenant without insurance will likely file suit against the landlord for the value of their possessions. But, if that tenant retains an insurance policy, they will likely report the claim directly through their own agent. Another major advantage is a decrease in liability. If your tenant’s dog bit someone, the victim could technically file suit against you, the landlord. However, if the tenant has liability coverage, this may cover the damages and prevent you from having to file a claim with your own insurance company.
The bottom line is that renter’s insurance is very valuable, not only for the tenant but for the property owner as well.