What does Renter’s Insurance Cover and Why Your Tenants Need it

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Renter’s insurance policies vary from company to company as to what is covered by the policy. There are, however, several coverages are standard in the industry. The landlord has insurance that protects the property against disasters such as fire, and other damaging events. The renter’s personal property is not covered under the landlord’s policy, so the renter must assume the responsibility to provide the coverage necessary to protect themselves from unexpected events. But just what is available to be covered by these renter’s insurance policies?

renters insurance

The renters insurance policies primarily insure the personal property of the renter. That covers a wide array of personal property and potentially hazardous disasters. Here is a list of coverages available with renter’s policies:

  • Personal property: For example, Clothing, Jewelry, Furniture, Antiques, Televisions, Computers, Personal electronics, Appliances, Firearms, and Musical Instruments. This isn’t a comprehensive list, but it gives an idea of the personal property that is covered by renter’s policies. Higher value personal property items can be scheduled so that they can be insured for more value than just the blanket coverage provided in the renter’s policy.

  • Personal liability: Renter’s policies can provide coverage for damages caused by the actions or the negligence of the renter. This can be a big life saver for landlords and property owners.  This coverage can often times be expanded to cover medical payments as well.

  • Water damage: This addition to a renter’s policy covers water damage that is caused by sewers or drains that get backed up. It should be noted that this coverage is not the same as flood insurance.

  • Loss of Use: This addition to the renter’s insurance policy reimburses the insured’s cost and damages that result from not being able to live in the rental property.

The coverages provided in a renter’s insurance policy can insure against damages from a number of different perils. Here is a list of possible events that are covered by renter’s policies.

  • Fire, various causes. Also includes smoke damage and lightning.

  • Weather and Acts of God. For instance, Tornadoes, Hurricanes, earthquakes, wind storm damage, and volcanic activity.

  • Malicious mischief. This would include theft and vandalism. This coverage can typically be extended to cover personal belongings that are kept away from the home. For example, motor vehicles, trailers, or boats and watercraft.

Renter’s insurance policies are much like the homeowner’s policy as far as the events that are covered. The landlord should encourage any tenant to take advantage of the low cost of renter’s insurance. The renter should assess the risk involved with not having renter’s insurance and take a look at the coverages offered in the event of disaster with these policies. One potential failure involved with renter’s insurance is the fact that the renter may assume that their personal property is insured by their landlord’s home owners policy. Renters must be informed and educated that they have zero coverage or recourse in the event of a loss. Through renter’s policies, coverage is available that insures against most personal or natural disasters.

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  1. says

    Re informed and educated: Recent surveys indicate that as much as 50% of renters don’t hold their own policy for various reason. Meanwhile, there is an increasing trend for landlords to require renters insurance coverage of prospective tenants as part of the terms of the rental agreement. At the very least, its good practice for landlords and property managers to provide some basic information to prospective tenants on the role and benefit of renters insurance, which benefits both the tenant and landlord.

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