Tenant Insurance: How it Works, Why You Need it

February 13, 2013

Tenant Insurance for Rental HomeHome insurance is something many people think of only when buying a house; they don’t often connect it with renting an apartment, townhouse, or single family home. The truth is that no matter what kind of home you are renting, tenant insurance is a must-have. It’s the only way to protect your valuable personal property from theft, fire, and many other risks.

Who Insures the House?

No matter what type of residence you are renting, tenants are not responsible for insuring the structure itself. Apartment buildings, duplexes and townhouses are all covered by a special type of policy. Single-family homes are also covered by a specific type of policy. As the owner of the building, the landlord is responsible for covering the building itself and everything that is a part of the building including fixtures, plumbing, and floor coverings.

Tenants do not need to provide any sort of insurance for that portion of the premises. That doesn’t mean, however, that they don’t need a home insurance policy. What’s important to note about the landlord’s policy is that it only covers what the landlord owns – it does not cover anything that you as the tenant own. It also doesn’t provide you with any sort of liability coverage for injuries or damage. The landlord’s policy is designed only to protect the landlord’s interests.

Insuring Your Property

Your personal property is not covered under the landlord’s policy. That means that everything you own, from your toothbrush to your computer, has no coverage unless you provide it. What would happen if a fire destroyed everything in the home you are renting? Your landlord’s policy would rebuild the structure, but it wouldn’t replace anything belonging to you.

The cost to replace everything you own could easily rise into the thousands. Most people could not afford to replace all of their personal property if it was all destroyed. A tenant policy is the only way to provide the coverage you need to make certain that you aren’t left with nothing after a fire, theft, or similar incident.

You can select the amount of coverage you need in order to replace everything from furniture to linens. Like a homeowner’s policy, you can also add riders to the policy to protect valuable items such as jewelry, art pieces, or musical instruments.

The property coverage on your tenant policy will protect your personal property anywhere you take it. That means if your camera is stolen while you’re on vacation in Europe, you can file a claim to replace it. It will cover your property while in your car, which contrary to common belief isn’t a coverage auto insurance provides.

Liability Coverage

Liability is another area that many people don’t think about when they are renting. It has become so important, however, that some landlords are now requiring that their renters carry a tenant policy mainly so that they have liability.

The liability coverage on a tenant policy will protect you from the same sort of problems that it would on a home insurance policy, including providing medical payments to anyone injured in your home. In addition to that, it provides coverage to protect you from lawsuits should you be found responsible for any sort of damage to the property itself. Like a homeowner’s policy, that liability can be extended beyond your front door and protect you for special events like weddings and other possible negligence situations.

Every Renter Needs Coverage

In a world where lawsuits are all too common and unexpected things happen every day, every renter is wise to carry a tenant policy. Because they don’t involve covering a structure, they are actually very affordable. The cost of the premiums is well worth the protection this type of policy can provide.

Whether you are a young person on your own for the first time or a family renting a house, a tenant policy is the best way to protect yourself and your property. And there’s more good news – many insurance companies offer a multi-policy discount on car insurance to those who take out a renters insurance policy through the same company. That means you could save on your car insurance while making the tenant policy even more affordable.