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 water damage from a burst pipe. I
n the second scenario, the rental property would pay for the damage. Renter’s insurance differs 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 to be compensated for lost, stolen, or damaged possessions.
If you have a guest at your rental residence, they are injured on the property. You could be held responsible even if it’s not your fault that the guest was damaged. Renters insurance will shield you from liability for the injury and its subsequent medical cost.
Another reason to have renter’s insurance is that it will cover your personal property, even if it may be in the rental property. The policy could include having something stolen from your car or losing a suitcase on vacation. Depending on the 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 glassware display at a department store.
By requiring your tenants to carry renters insurance, you protect yourself or your company from liability. 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 home and reduce the chance of a lawsuit from the injured party.
Requiring renter’s insurance means allowing tenants to have pets. Most renter insurance policies cover damage from pets to a specific size. 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 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 want the best for the tenants and want them to be protected, even if it’s not your responsibility.
Whether you are a tenant or a landlord-owning renters’ insurance can give you peace of mind that your possessions or rental property are covered. On both sides of the renter’s insurance policy, the cost of lawsuits can be reduced or covered altogether. Regarding rental properties having renter’s insurance is the smart choice.
If you have questions about Renter’s Insurance or Rental Dwelling Policies, contact us at (863) 646-LOCK.
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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