If you live in a residential building or apartment complex, it’s natural for certain fears to cross your mind. For example, if a fire accident or flooding occurs through no fault of your own, who pays for the replacement of your possessions that get damaged or destroyed? What if several units are burgled and one of them happens to be yours? Who pays for the stolen items?
These are all legitimate concerns, and if you’re a tenant, it’s worth thinking about purchasing renter’s insurance.
Renter’s insurance, often referred to as tenant insurance, is the protection offered by insurance providers on a tenant’s personal property. The insurance covers a variety of losses and damages, including those caused by fire, theft, accidents, natural disasters, and many more.
If you’re renting a home, it enables you to get coverage for your personal goods. Meanwhile, landlord’s insurance protects only the building, so it doesn’t cover your belongings or personal property.
But did you know that renter’s insurance benefits both tenants and landlords?
Benefits for tenants
Since renter’s insurance is meant for tenants, it’s easy to understand why it’s designed to benefit them.
But to be more specific, renter’s insurance provides the following advantages to tenants:
- It covers your personal possessions, including your laptop, camera, tablet or smartphone.
- It can be a source of additional living or relocation funds in cases where your rented home becomes uninhabitable because of substantial damage or ongoing repairs.
- It’s a relatively inexpensive way to ensure your peace of mind because you know you have adequate coverage for your things any time you need it.
With renter’s insurance, high-value items like jewellery, antiques and artworks may not be included in the coverage.
To know the details of what is and what’s not covered by your renter’s insurance, make sure you discuss your policy with your insurer. This way, if you need to take additional insurance for items that are not covered, you may do so right away.
Benefits for landlords
It’s not quite as obvious, but landlords also benefit if they require prospective tenants to get renter’s insurance as a prerequisite prior to finalising the details of their rental agreement. Why?
- It can help prevent unnecessary but expensive litigation. When property damage occurs because of another tenant’s negligence, building insurance may not cover this, but renter’s insurance can. This means that the affected tenants won’t feel compelled to sue the landlord (even when the landlord is not responsible for the damage at all), and can, instead, file a claim with their insurer.
- It protects other tenants. If a tenant has a pet that ends up injuring a visitor or another tenant, or commits negligence that leads to property being ruined, renter’s insurance covers both or similar types of damages.
- It can help landlords identify not-so-great tenants. Renter’s insurance is incredibly cheap—sometimes costing only a little over $300 per year. Therefore, if a tenant refuses to get it as a requirement, they might not be the ideal tenant you want.
Renter’s insurance is something well worth considering for your peace of mind—whether you’re a tenant or landlord.
To know the exact coverage you’ll be getting, be sure to read the fine print and discuss the details of your policy with an insurance expert.
If this article has inspired you to think about your own unique situation and, more importantly, what you and your family are going through right now, please contact your advice professional.