Let's face it, there are so many things that can go wrong on a rental property.
From damages to the property to injuries, rental properties are home to many possible mishaps.
Now, if only there were a way to protect renters and landlords from being liable for all of these situations.
Luckily for you, there is. And it's called renters insurance.
In this article, we will be discussing what can renters insurance protect, as well as other information like its cost and whether it is a necessity for rental properties.
To begin, let's go over what rental insurance is and what it covers.
What Is Renters Insurance?
Renters insurance is a type of insurance that covers a wide variety of unexpected events, also known as covered perils.
This kind of insurance covers events ranging from personal property coverage, liability coverage, and even additional living expenses. Renters insurance coverage is obviously very broad and can come in handy in many situations.
However, it is very important to know exactly what your renters insurance coverages look like before investing. In the next section, we will be going over some of the main things that renters insurance covers.
What does renters insurance cover?
Renters insurance covers a variety of situations.
Before we cover the specific benefits, let’s talk about what renters insurance covers.
Keep in mind that what the policies you’re offering cover may differ from this list, so contact your insurance provider to make sure you’re clear on your own policies.
However, renters insurance typically covers:
1. Damage from natural disaster
This includes any tenant personal belongings such as electronic devices, furniture, kitchen appliances, jewelry, vehicles, and more in the event that they’re either damaged or destroyed.
2. Liability due to injury
In the case of an injury by a guest visiting the property, your tenant would be liable. Renters insurance typically covers any form of injury incurred by a guest while on the property.
It also covers and medical expenses related to the injury that the
Similarly, if a tenant’s belongings are stolen, or the property is damaged, as a result of theft, renters insurance typically covers the damages.
4. Property damage due to negligence
Damage to the property due to negligence can be covered in some cases depending on the policy.
What are the benefits for landlords?
So far, we’ve talked a lot about the benefits to tenants. But what are the benefits of renters insurance to landlords?
Here are a few:
1. Protects you from lawsuits
Easily one of the biggest reasons, having renters insurance protects you from lawsuits in the event that your tenant’s belongings are damaged within your property, whether due to:
- A fire
- Or other natural disaster.
And before you think your liability insurance will cover you in this type of event, it likely won’t, even if the tenant is injured due to their own actions.
2. Protects you from paying for property damage
Similar to a lawsuit, you could be sought by the tenant to pay for damages to the property in the event of an accident if they have no way of covering it.
No matter what you think of your tenants, it’s better not to assume how they’ll behave after a disaster and instead require a renters policy to cover you even further.
3. Keep your insurance premiums down
If your tenants not having renters insurance means you’re more likely to be hit with a lawsuit or damage claim, that can lead to other issues.
One issue is that being hit with a claim can increase your insurance premiums.
And rack up multiple claims? Your insurance provider could cancel your policy altogether.
4. Accept pets
What does renters insurance have anything to do with allowing pets?
Renters insurance can cover the property damage resulting from having pets as well as liability in the event of dog bites.
However, make sure to check with your insurance company to make sure what the renters insurance policy you offer covers as some don’t offer pet-related coverage.
Can Landlords Require Renters Insurance?
After reading all of these benefits, you may be thinking to yourself that you may as well just make renters insurance mandatory for tenants.
Unfortunately, that completely depends on the state that you are in.
Some states, like California, do allow landlords to require renters insurance. However, if you want to know about your specific state, it is best if you check out that state's landlord-tenant laws.
So, now that we know all about the many benefits of renters insurance, let's discover the most important part - how much it costs.
Renters Insurance Cost
The best part about this is how much renters insurance costs. For all of the coverage listed here, and possibly more, renters should look to spend around $179 per year or about $15 a month on renters insurance.
There are a few things that may cause the cost of renters insurance to vary, including:
- Where you live
- How much coverage you want
- Your credit history
- Your previous claims
- Coverage limits
Some insurance companies may even offer renters insurance discounts to help lower the cost of premiums and get you a lower renters insurance quote.
Renters insurance provides a number of great benefits to landlords that you may not have realized.
Plus, the combination of benefits and low price your tenants can take advantage of means they have very little to lose in getting it and much to gain.
So, use the points we talked about above to make your renters insurance policy compelling and enticing.
As a result, you’ll be covering yourself in a myriad of ways that your liability policy either may not or does not cover you and your property.