Why Apartments Require Renters Insurance?

In most apartments in this time and age, your landlord will require you to take a renter’s insurance policy before you can sign the lease. Renters insurance is a form of property insurance explicitly designed for individuals who rent a property. It prevents your products from any incident, such as a fire, storm, or burglary, from being stolen, damaged, or lost.

Understanding what renter’s insurance is and how it benefits both you and your building manager is important since you never know when disaster will hit.

Keep reading to learn more about this insurance policy, how much it will cost you, and so much more.

What does renters insurance cover?

While the owner of the building is liable for the loss or damage to the physical property, fittings, and any furniture, the personal belongings are usually not. The property security insurance policy of a homeowner typically protects the physical assets connected to the home you are renting. This could include housing that, if destroyed by fire, lightning, wind, hail, or other damages, may help pay for your rental house, condo, or apartment. It also covers repairs to loose structures, such as a detached garage or fence in your rental property, if they are damaged by the loss. 

 As a renter, you must take measures to safeguard your belongings and ensure that they are properly insured. The lack of insurance can be frustrating in the case of a natural disaster or robbery and potentially cause substantial harm to your bank account. Here are some of the coverage areas of a renters insurance policy.

1. Personal property

This is the most obvious reason to get a policy on your apartment. You never know when damage will strike so having this with you will go a long way. It is also helpful that your insurance extends the walls of your apartment. For example, if you are robbed or you misplace a watch or a necklace, the items might be reimbursed by your insurance sine theft is under the scope of your insurance.

2. Additional living expenses

 Even if you don’t think your equipment is worth it, tenant insurance is a good idea. Tenant insurance is more than just your personal belongings at home. Tenant’s insurance covers the “extra cost of living” if your place of residence becomes uninhabitable after a disaster and you have to temporarily relocate. Coverage will pay you for additional costs such as the cost of staying in a hotel.

You should note that in such a scenario, insurance policies usually specify a maximum amount so before you splurge, you should go over your policy to decide on an option that will comfortably fit the budget.

3. Liability coverage

Renter’s insurance includes liability insurance to cover injury and property harm that you and your family might cause to others. This refers to your property or someone else’s property. If someone is injured in your apartment or you unintentionally hurt someone and are sued, your renter’s liability insurance will cover your legal and litigation expenses up to the insurance cap. 

In some cases, this scope also includes liability for your pet. If your furry friend attacks another person or causes damage to property in the apartment, your insurance might cover it. In some cases, the coverage will also protect your property from pet damage but this is not always the scenario. As you choose a premium, ensure the agent clearly explains what is covered and what is not.

4. Subletting

Some renters may decide to rent out a room in their apartment or the entire unit when they are out of town. Renters insurance offers protection for the tenant’s property if they decide to list their home on Airbnb. 

The policy also covers the guest’s well-being and belongings as long as they are in line with the terms of the agreement. Also, before you sublet your apartment, you should go through your lease and your local laws on short-term renting. It would also be a show of goodwill to let your landlord know if you intend to.

What doesn’t renters insurance cover?

A. Rent 

 You must know that if the rent cannot be paid due to a decrease in income, rent insurance usually does not cover the cost of the rent. If you are looking for insurance that covers you from a loss of income, you may want to consider taking an income protection insurance policy in addition to the renter’s insurance. 

B. Acts of nature

Many homeowners and renters insurance policies do not cover damage caused by floods and earthquakes. If you live in an area prone to these events, you should consider getting a separate policy that covers them.

How much will renters insurance cost me?

The cost of rental insurance can vary depending on factors such as the amount of coverage you choose, your deductible, the decision to add ancillary services, the history of your needs, and where you live.

 Before taking a policy, it is important to correctly assess the total value of your property to ensure that you are properly insured. One way to do this is to use a content calculator. It may be a good idea to use a calculator that asks a series of detailed questions to get more accurate results. It is also worth independently evaluating more expensive items. 

For items like jewelry, some insurance companies offer sub-limits. This means, regardless of the value of the item, if anything happens you will only be reimbursed a maximum of a certain cost. You will be given the option of increasing these limits but this will mean a more expensive premium.

After purchasing your insurance policy, be sure to keep a detailed record of your belongings, if you ever need to file a claim – things like receipts, photos, and ratings can be important. A detailed list may be required to verify your losses and validate your claim. 

When you file a successful claim, your insurer can repair or replace your damaged goods or will pay you the amount it will cost to repair or replace them.

Why is renters insurance important to your landlord?

Your landlord will probably insist that you have insurance before you sign the lease. This way, if there is any incident, neither you nor your landlord has to go out of pocket to cover replacements and repairs. Here are a few other reasons why:

1. Protection from lawsuits

 Landlords prevent future tenant lawsuits due to harm to property or other insured damage, likely due to fire, by providing tenant insurance. Because the tenant’s policy includes the cost of harm to the tenant’s personal property, there might be fewer lawsuits against the landlord’s rental policy.

If one of your visitors is injured in your home and has no insurance liability coverage to pay for medical care, your liability will be reduced, and the landlord will demand relief from that person. Your landlord will guarantee that your insurance policy is the first to compensate when the injured guest returns for compensation by requiring you to take out the tenant’s insurance, ensuring that the landlord does not have to pay legal expenses associated with a lawsuit for bodily injury.

2. It covers the landlord’s deductible

This prevents you from trying to collect damage costs from them. Homeowners and their insurance companies are solely responsible for the structural damage to the building. But many tenants are unaware of this and expect the landlord to change their personal belongings in the event of an accident. By requiring you to take out tenant insurance, your landlord eases the wait to change your belongings. This helps them to recover from injury. Your landlord’s insurance will cover the damage to the house if you accidentally damage the fire or water in your apartment by leaving the bath, but only after the landlord pays the deductible. However, the landlord will collect this deduction from the insurer if you have tenant insurance. You may be responsible for paying the cost of relocating a tenant in the event of a fire or other natural disaster, depending on which state you reside in.

3. It reduces the landlord’s obligations

As a tenant, you might feel that it is your landlord’s responsibility to give you a temporary housing solution when your property is impaired, even though it is not needed by state law. The insurance policy of a landlord would not protect a tenant if the estate is damaged or someone is injured by the negligence of the tenant. The renter’s insurance will cover a  housing alternative as repairs and renovations are made, absolving the landlord of any responsibility.

4. Show of credibility

If a  tenant has a renters insurance policy, this affects their credit score positively. For this reason, it can be used to show your ability to pay rent on time. This assures the landlord that they are less likely to get into problems with you about the rent.

In conclusion, taking a renters insurance policy will protect both you and your landlord from the financial burden that comes with legal fees, repairs, and reimbursements from events that neither of you may be to blame for. Besides, renters insurance is affordable so it is a small price to pay for peace of mind.

Melanie Asiba

Melanie is an author, and she enjoys traveling, reading, and trying out new things. In addition to writing for Apartment ABC.