As a renter, the apartment or townhouse you live in may not require you to have renter’s insurance, but not having it puts your possessions at unnecessary risk. As a landlord, you can protect your tenants and your bottom line by making it part of a lease agreement. Here’s why if you’re are a renter or landlord you should consider renter’s insurance.
Renters insurance is a type of insurance that covers your personal property in a rental residence. It repays tenants for lost, stolen, or destroyed belongings. Renter’s insurance also covers vandalism, fire, and natural disasters. Most policies don’t cover flooding or something like water damage from a burst pipe. In the second scenario, the rental property would be responsible for paying for the damage. Renters Insurance is different from a Renter Dwelling Policy which covers the physical structure; renters insurance covers the tenant’s belongings (and liability) inside.
It’s not hard for tenants to purchase renters insurance, and it usually costs about $12 a month for most rental units depending on the scope of what the policy covers.
Renter’s insurance is the only way tenants are guaranteed they’ll be compensated for possessions that are lost, stolen, or damaged
If you have a guest to your rental residence, and they are injured on the property. Even if it’s not your fault that the guest was injured, you could be held responsible. Renters insurance will shield you from being liable for the injury and the subsequent medical cost related to it.
Another reason to have renter’s insurance is that it will cover your personal property even if it may be located in the rental property. The policy could include things such as having something stolen from your car or losing a suitcase on vacation. Depending on coverage, some renter’s insurance policies will cover damage to other’s property such as bumping into a crystal vase and breaking it, or your child knocking over a display of glassware at a department store.
By requiring your tenants to carry renters insurance, you protect yourself or your company from being liable. If someone gets injured in your tenant’s rental residence, you could be sued for medical costs, even if you are not responsible. Renters insurance would pay for someone’s injury in a rental residence and would reduce the chance of a lawsuit from the injured party.
Requiring renter’s insurance means that you can allow tenants to have pets, most renter’s insurance policies cover damage from pets up to a certain size. Obviously, it would not cover someone having a pet like a donkey in their apartment.
Requiring your tenants to have renter’s insurance would also cover relocation costs in the event of a fire or natural disaster. This benefit would keep your company from having to cover the costs of a hotel. It may be that you or your company just want the best for the tenants and want them to be covered even if it’s not your responsibility.
Regardless of if you are a tenant or a landlord owning renters’ insurance can give you peace of mind that your possessions or your rental property are covered. On both sides of the renter’s insurance policy, the cost of lawsuits can be reduced or covered altogether. It’s clear, when it comes to rental properties having renter’s insurance is the smart choice.
Don Westerfeld has been active in the field of Insurance and Financial Planning since 1997. Don grew up in Indiana later moving to Lakeland Florida where he continues to reside with his wife and children. When he’s not in the office you can find him enjoying the great outdoors. He has served on several charitable business and non-profit organizations and continues to provide guidance, advice and support to local charities.
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