Tenant Insurance: Who Needs It and What Does It Cover?

Benjamin Franklin once said, “failing to plan is planning to fail”. As uncertain as this world is, you can’t afford not to plan for surprising events such as a home disaster.

Surprisingly, 1 in 40 homeowners with property insurance file a property damage claim every year. This goes to prove that purchasing property insurance is essential for protecting your personal belongings. 

Even if you don’t own your home, you should still buy tenant insurance to receive item reimbursements in case a disaster happens. Before choosing your renters insurance, take a look at everything you need to know about the subject below.

What Is Tenant Insurance?

Tenant insurance is an insurance policy for people renting a home. It’s universal, whether you’re renting a home, apartment, condo, or duplex. Tenant insurance isn’t just for people renting a home from a landlord.

It can even be purchased by someone whose name isn’t on the lease. In a nutshell, renters insurance protects the personal belongings of the tenant when a home disaster takes place.

There are several nuances to tenant insurance that you should be aware of. Here are some key takeaways:

Tenant Insurance Is Comprehensive

When you buy a tenant insurance policy, you won’t just be reimbursed for your property’s damage. Tenant insurance will cover any premises liability dispute to prevent legal action from being taken if someone gets injured on your property.

Your policy will also reimburse you for relocation costs while you’re away, such as hotel fees. 

Tenant Insurance Can Cover Expensive Valuables

If you’re afraid of exceeding your policy’s limit, don’t worry. Policyholders can increase their coverage for expensive items that aren’t covered by their existing plan. 

Tenant Insurance Is Affordable

One of the best things about renters insurance is that it’s relatively affordable for anyone. In fact, renters insurance costs $14 a month on average. 

Is Tenant Insurance Required?

Is tenant insurance required by law? The short answer is no. There aren’t any federal or state laws that require tenants to carry renters insurance. However, it’s totally up to the landlord whether or not you’re required to purchase coverage. 

Many landlords naturally have insurance that covers the structure of the property. This coverage doesn’t extend to anything inside the property. For this reason, it’s recommended that you purchase tenant insurance. 

About 3.5 million home insurance claims are filed every year. This proves that natural disasters and sudden property damage are very possible for the average renter. Having coverage is the way you can protect your belongings after a catastrophe. 

What Are the Benefits of Having Tenant Insurance?

Buying tenant insurance isn’t just optional. Making this purchase can have a serious positive impact on your financial future. Here are some notable benefits of buying renters insurance:

Renters Insurance Is Affordable

Again, renters insurance rates can be as low as $14 a month. Whether you’re saving up to buy a home or dedicated to a shoestring budget, there’s bound to be a tenant insurance policy you can afford.

You’ll Be Reimbursed for Lost or Damaged Property

A renters insurance policy can reimburse you for all of your personal property including:

• Jewelry
• Clothes
• Electronics
• Furniture
• Luggage

As long as your losses weren’t the result of intentional actions or negligence, you’ll stand to collect a cash amount for each item you lost. 

You Can Avoid Premises Liability

Premises liability is a tricky subject. The landlord’s insurance will protect him or her if someone is injured outside of the property.

For example, if someone falls down the outside stairs of your property, you wouldn’t be held liable because it’s the landlord’s responsibility to maintain the property. 

Though, the landlord’s insurance protects him or her from any liabilities inside the home. For example, if you mop the floor and someone slips, you could be held liable instead of the landlord.

This is because you’re responsible for maintaining the part of the home you live in. Renters insurance makes it easier to avoid premises liability disputes and receive the peace of mind you deserve as a tenant. 

What Does Renters Insurance Cover?

Not all renter’s insurance policies are the same. The disasters your policy covers will ultimately depend on the provider you choose and the type of home you’re renting. 

Fortunately, most renter’s insurance policies cover a lot of disasters. Your typical HO-4 policy covers perils such as:

• Hailstorms and high-speed winds
• Smoke 
• Theft and vandalism
• Vehicle and aircraft damage
• Explosion
• Lightning and fire damage
• Falling objects 
• Volcanic eruption
• Ice, sleet, and snow
• Civil unrest

Usually, losses caused by floods and earthquakes aren’t covered by traditional renters insurance. You’ll need to purchase this coverage separately for your home. 

This means if you live in California where earthquakes are common (or in New Orleans where flooding is common), you should speak with CMB Insurance Brokers about giving you the best deal on coverage. 

Tips for Buying the Best Tenant Insurance

If you’re new to the process, you may not know how to shop around for the best tenant insurance policy. Luckily, we’ve compiled some helpful tips below for you to get started:

Compare Different Quotes

It can be tempting to side with the first insurance agency that spins you a great line about how they’ll give you the best deal. To save money in the long run, do your research and compare different quotes before committing. 

Consider Your Personal Belongings

Granted, it’s recommended for every renter to buy tenant insurance. However, if you don’t have a lot of valuables in your home, it won’t make much sense to commit to a high policy limit.

Make sure to take inventory in your home and choose a policy limit that’s best for you. 

Hire an Insurance Broker

Insurance agents work for insurance companies. They are paid by commission and can be biased when selling you insurance.

Insurance brokers work with different companies, and it’s in their best interest to give you the best deal. Make the right decision and choose an insurance broker without the conflict of interest.

Learn More Lifestyle Tips

As you can see, renters are not required to buy tenant insurance. But, making the purchase can go a long way toward protecting your personal belongings from a sudden disaster.

With that said, do you want to learn more lifestyle tips? If so, check out our blog for more helpful articles.