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Landlords in New York City must do everything they can to protect their properties from property damage. Likewise, they're focused on liability against renters and guests who may want to sue for damages. Though they have landlord's insurance to cover them, it's also wise for them to ask tenants to get renters insurance.
As the landlord, you can require renters insurance in New York from each tenant. However, you may not understand what it is or why it's necessary. You'll learn all about it today.
In fact, you'll learn what renters insurance is, how it protects the tenant's personal belongings, and which companies have the best rates. Take a moment to check out the NY Department of Financial Services website to get more background information to help you decide if requiring renters insurance is right for you.
What Is New York Renters Insurance?
Anyone who rents an apartment, room, or home can and should buy renters insurance. Overall, renters insurance covers the tenant's personal property, whereas landlord's insurance protects the real property, such as land and buildings.
Many renters are confused because they believe landlord's insurance covers them if something happens to their items. However, the landlord is typically only responsible for their own property.
Tenants rarely want to spend more than necessary, so they might not get a renters insurance policy in New York City without it being required by the landlord. You can mandate it in your lease, which will protect you from liability and angry customers down the road.
Average Cost of Renters Insurance in New York Per Year
People tend to claim they don't have the budget to buy it, but the average cost of renters insurance is about $187 per year, which is only $16 per month. Standard coverage limits will range from about $25,000 to $50,000, but most renters insurance companies will allow tenants to customize this based on their needs.
With the renters insurance cost in New York being so low, it makes sense for tenants to buy it without question. However, many people won't do so unless it's required in the lease agreement.
It is possible to lower the renters insurance cost the tenant pays if they're willing to get a high deductible or use the discounts available from each company.
Average Renters Insurance Rates Based on Popular Cities
According to Lemonade, the average renters insurance rates tenants pay will primarily depend on the city they live in. Some cities have higher cost of living expenses, more crime, and other factors that will make it a little more expensive. Here are the most popular prices people pay for renters insurance based on their city of choice:
- New York City - $23.50
- Staten Island - $18
- Queens - $17
- Manhattan - $20
- Brooklyn - $19
- The Bronx - $17
Does the State of New York Require Renters Insurance?
The state doesn't mandate tenants to have a renters insurance policy in New York, but many landlords will require it in the lease. Though landlords might not require renters insurance, it's still wise to have it.
Overall, most tenants will not get renters insurance voluntarily because they don't want the added expense. When bad things happen, they realize their mistake. As the landlord who requires it, you could help them protect their items and reduce your risk of liability.
With so many renters insurance companies in New York, it's hard to know where tenants should go. You'll learn more about the brands and options available, as well as a software solution that can help you and renters.
What Does Renters Insurance Cover in New York?
A renters insurance policy will generally cover the damage or loss from:
- Water (appliance failure, plumbing failure, accidental discharges of water, and fire sprinklers)
- Weight of ice, snow, and sleet
- Windstorm and hail damage
- Civil disruptions (theft, riots, vandalism)
- Smoke
- Fire
- Electrical surges
- Falling objects
- Explosions
- Lighting
Here are the four major types of coverage tenants can get with renters insurance:
Personal Property Coverage
Renters insurance covers the tenant's possessions within the home or on the property from things like water damage, fire, vandalism, and theft. It's called personal property coverage, and it protects most things. However, tenants may wish to get extra coverage for valuable items, such as artwork, jewelry, and expensive belongings.
Liability Protection
Usually, renters insurance ensures that medical bills and compensation are paid for harm to others who are visiting the premises or home. This includes accidental property damage and injuries inflicted by dogs and other animals.
Loss of Use Coverage
Loss of use is when the tenant's rented space is uninhabitable after a covered event, such as a windstorm or fire. It's often called additional living expenses coverage in the policy, and it reimburses them for temporary accommodations, food, and other things.
What Does Renters Insurance in New York NOT Cover?
In most cases, renters insurance policies will not cover the structural aspects, such as floors or windows. The landlord's insurance will reimburse them for those things.
Usually, renters insurance doesn't cover damage for specific situations, such as pests, earthquakes, and floods. Tenants may have to buy separate flood insurance or earthquake insurance if they fear they may deal with those conditions at some point while living in the building.
Here are a few more things that may not be covered:
Losses Over the Tenant's Policy Limit
Renters insurance will come with a policy limit. Therefore, the company will only reimburse tenants up to that amount. This is why it's crucial to inventory items before buying.
Non-covered Events
Sometimes, damages aren't covered by the policy. We talked about floods and earthquakes earlier, and this is the primary source of concern. However, it's often possible to buy an endorsement or rider, which is like a separate policy that protects against those events. They usually have their own deductibles and will cost more.
Unscheduled Valuables
Tenants may have high-cost items, such as electronics and jewelry. In this case, the renters insurance might not cover the loss or damage. These are considered unscheduled or unlisted valuables. Usually, renters insurance providers will offer endorsements or riders to cover them separately, but it does cost more.
How to Choose the Right Renters Insurance Policy
You probably won't be buying renters insurance as a landlord, though there are circumstances where it's appropriate. Regardless, it's important to be as helpful as possible to tenants who are searching for policies and companies. Knowing these tips for selecting renters insurance will assist them and help you feel confident that they're fully covered:
Choose a Coverage Amount
Renters insurance covers the cost of replacing the tenant's belongings after an accident, natural disaster, or theft. The amount of coverage they require depends on many factors.
When choosing a policy amount, it's wise for tenants to completely inventory their possessions to get an accurate idea of what they might need. They should list the item, when they bought it, how much they paid, and what it's worth now. Add all those up to get the coverage estimate.
It's also important for tenants to understand that renters insurance offers liability coverage. This protects them if someone is hurt or other people's property is damaged while at the unit.
Know What's Not Covered
Usually, renters insurance protects tenants in many circumstances, but it won't cover everything. Tenants should know what the policy does and doesn't include to ensure it has everything they need.
Shop Around
There are countless renters insurance providers out there, and it's wise for tenants to research options. Though they can use this article for reference, they may want to do their own homework to ensure they're getting the best deal and coverage.
Adjust the Deductible Amount
The deductible is what the tenant pays out of pocket before the insurer will pick up the rest. Many companies offer different deductibles to help those who need renters insurance save money. However, if they have an incident, they might spend a lot more to get new items than if they'd had a lower deductible the whole time.
Available Discounts in New York
All renters insurance policies have different discount options, which are based on the company chosen. However, here are the top discounts available:
- Bundling discount (bundle renters insurance with another policy)
- Protective device discounts (smoke detectors, fire alarms, fire sprinklers, burglar alarms, etc.)
- Pay in full discount
- Easy pay discounts
- Retirement discounts
- Claims-free discounts (don't file a claim for a specified time frame)
- Early shopper discount
- Online purchase discount
- Preferred payment discount
How Does a New York Renters Insurance Policy Protect the Landlord or Property Manager?
Now that you know why renters insurance is so important and what it covers, you might be wondering how it protects you as the landlord. Here are a few reasons why you should require it of your tenants:
Relocation Expenses
New York is one state that requires landlords to cover tenant relocations in certain situations, such as after natural disasters or fires. Even if you're not mandated to do that, you might feel obligated to do so. However, renters insurance policies offer loss-of-use or temporary living costs if the tenant must relocate.
Less Lawsuit Risk
Landlord insurance does include liability, but it probably won't cover the tenant if their personal belongings are damaged, or someone got injured at the tenant's unit because of their carelessness. Requiring renters insurance protects their items against loss or damage and offers personal liability if someone is hurt on the property.
Protects Tenants from Property Damage Disputes
If a tenant's property was damaged through no fault of their own, they often sue the landlord for damages. Your landlord insurance won't cover their belongings, but renters insurance could. Therefore, you get more peace of mind.
Be Pet Friendly
Landlords often dislike accepting pets, but this limits their pool of applicants. Renters insurance could mitigate the risks of allowing pets because of property damage coverage and dog-bite liability protection. Though it depends on the insurer, it might be helpful to let tenants know about the potential.
Top 5 Best Renters Insurance Companies in New York
Are you ready to learn about the cheapest renters insurance companies in New York? Even if you don't need it yourself, you can give this information to your tenants to help them in their search. Let's dive in!
1. Lemonade Renters Insurance
Lemonade is a newer insurance company, but it's becoming increasingly popular because it offers a great user-friendly app and website. Overall, it makes it easier for tenants to purchase renters insurance coverage!
One excellent feature of this company is that it has a strong financial strength. Policyholders are guaranteed to get swift service when they file a claim. Likewise, it offers competitive rates, so it's an excellent option for renters insurance policies in New York.
With Lemonade, there are various plans tailored to each tenant's budget and needs. The basic option is only $5 per month, but tenants can customize coverage to get what they need, including more living expenses and loss of use protection. Likewise, it's possible to save money when tenants pay premiums in full and upfront.
Overall, Lemonade is different than other insurers because it uses technology effectively. There are no long telephone calls with agents; everything's done online through the app. The AI-driven process will save time! Plus, it's easy to add coverage whenever it's necessary.
While there aren't many discounts, Lemonade does offer these options:
- Pay in full
- Protective devices (smoke detectors, burglar alarms, and more)
- Bundling discounts
2. Allstate Renters Insurance
Allstate is a very well-known insurance company. In fact, it's one of the oldest insurers out there, and it's financially stable. Likewise, the agents have tons of experience.
Tenants will like the website because it's easy to use and navigate. Plus, it offers educational resources for novice and seasoned renters.
Overall, Allstate offers many great discounts, but the most unique one is for people 55 years old and retired. They could save $25 percent off the premium. However, the exact percentage can vary.
Likewise, Allstate uses local agents, which is ideal for older people who like to talk to a live person when they file a claim or buy renters insurance coverage. It's also possible to customize the policy to meet any needs, including getting more coverage for living expenses or earthquake damage.
Still, tenants should know that the agents at Allstate are independent contractors; they work for themselves. Therefore, their service quality and experience could vary significantly.
Additional coverages can include:
- Identity restoration
- Guest medical payments coverage
- Liability protection
Discounts can include:
- Retirement discount
- Easy pay discount
- Bundling discount
3. Liberty Mutual Renters Insurance
Liberty Mutual is an excellent renters insurance company because it's highly affordable. Its national average for premiums is much lower than other brands. Plus, it offers many options for renters insurance coverage, so tenants can get the amounts that protect them most.
Overall, Liberty Mutual offers many add-ons to expand coverage to meet the tenant's needs. However, it's one of few brands that allow tenants to choose $5,000 for personal property coverage. Most companies want tenants to get at least $15,000, and often $30,000 is the minimum.
It's important to understand that buying a policy with lower coverage amounts might not protect tenants from damages and losses. Therefore, renters should always evaluate their needs and inventory their personal property before choosing a coverage amount.
Additional coverages are also available, such as replacement cost coverage, earthquake insurance, and extra protection for high-value items.
Discounts can include:
- Online purchase
- Preferred payment
- Bundling discount
- Early shopper discount
- Claims-free discount (after five years)
4. State Farm Renters Insurance
State Farm is one of the largest insurers in the nation. It has more than 18,000 agents, and it offers affordability and reliability. In fact, this sets the renters insurance company apart from the others.
However, it's important for tenants to realize that State Farm agents are considered independent contractors. Therefore, they may have different options and experience.
Regardless, the agents will help tenants customize renters insurance policies to their needs. Plus, they usually have local offices, so it's easy to run in to file a claim or learn about coverage options. Likewise, this means the agents know the environment and housing choices available and what coverage amounts are typical or normal.
Overall, State Farm doesn't offer many discounts, with protective devices and bundling the only options.
5. Nationwide Renters Insurance
Nationwide is another large rental insurer and offers excellent premiums for tenants in NYC. The standard policies here include Brand New Belongings coverage. Typically, tenants get the depreciated value of their belongings. However, Brand New Belongings offers actual cash value coverage, giving them the current market value of stolen and damaged items.
However, this renters insurance company offers tenants the choice to upgrade to the full replacement cost coverage, which gives tenants the full cost to replace their items.
Many renters like the idea of actual cash value coverage, and it's great the brand recognizes this and offers it as standard.
Let's check out the discounts available from Nationwide:
- Claims-free discount
- Protective device discount
- Multi-policy discounts
Though there are discounts available, the rates at Nationwide might be higher than other providers. Therefore, tenants should research options and get multiple quotes before deciding.
What Is DoorLoop?
You now know that tenants should carry a renters insurance policy in New York because it protects them and offers you peace of mind. However, you're now worried about keeping all that information organized and safe. DoorLoop is here to help.
With DoorLoop, you have an all-inclusive property management software to help you, and it's available for landlords of all sizes. Whether you are managing a mixed-used portfolio or solely work with commercial or residential properties, you can use DoorLoop to do these things:
- Manage your rental portfolio.
- Manage your maintenance requests online and avoid having tenants call or text frequently.
- Collect rent on autopilot.
- Provide a tenant portal with many online tools.
- Manage your accounting.
- Receive a free and custom website (tenants can apply online, but you can market vacancies through Trulia and Zillow to get more applicants).
There's no need to be overwhelmed with managing a property. DoorLoop will make your life easier. If you're ready to test it out, schedule a demo today and learn more about this excellent software.
Why Work with DoorLoop
Tenants aren't likely to get renters insurance unless you put it in the lease for them to do it. The good news is you can mandate it through the lease! Today, you've learned how it all works, what it does, what it will cover, and which renters insurance companies in New York are ideal.
However, DoorLoop will help you require your tenants to get renters insurance in a few ways:
- They can submit their policy information through our software.
- Tenants can apply for coverage on the tenant application and through the tenant portal. It's all powered by Lemonade and SURE, depending on the state.
Are you ready to see how DoorLoop can help you require renters insurance with ease? Learn more today!
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