Tenant Insurance: A Quick Guide To This Helpful Real Estate Cover
If you’re planning on moving into a new rented property, it’s important to be aware of your rights and requirements as a tenant, including the insurance options available to you.
With the rush and panic that often surrounds finding a new home, many renters often aren’t aware of concepts such as tenant insurance. However, it might just be the cover they need to get the most out of their temporary living situation.
To keep you up to date and in the loop, we’ve pulled together this comprehensive guide to everything you need to know about the helpful real estate cover, tenant insurance.
What is tenant insurance?
Tenant insurance is a form of property insurance covering losses to personal property and protecting the insured from liability claims on their residence, from studio apartments to full homes.
This covers injuries and damages occurring in the rental property that aren’t a result of structural issues. Coverage will usually also account for damages, infestations, personal property theft and lost income. These details will be covered in more detail below.
Tenant insurance schemes are largely flexible, such as the kind offered by providers Duuo. This reflects the flexible and short-term lifestyles of renters and their time within these properties.
While landlord property insurance may cover the building itself, this scheme is very unlikely to cover the contents of your apartment or cover for damages accrued if you are sued by someone who has an accident in your rented space.
Rental insurance gives renters the kind of assurance security systems, safer neighborhoods and seclusion from neighbors.
What does it cover?
Tenant insurance typically includes three basic cover components. These are Personal Possessions, Liability and Additional Living Expenses.
This section covers the contents of your rented home. Typically, this includes damages or losses in the event of a fire, theft, vandalism, plumbing accident, electrical malfunction or weather.
The standard HO-4 policy will also cover personal property losses and damages in the event of explosions, riots and natural occurrences, among others. However, this does not include more common disasters such as floods and earthquakes, which require separate policies.
This coverage will protect you up to a certain amount in the event you are sued for an injury or another damage incurred in your home by other people.
It also covers the cost of damages you, your family or pets cause to others.
Additional living expenses
In the event your unit becomes uninhabitable due to one of the previously mentioned covered conditions, your insurance will cover you with some money to cover the cost of temporary housing. This includes hotel bills, restaurant meals, temporary rentals and other living costs during the rehabilitation period.
What doesn’t it cover?
However, you should also be aware of the many things typical tenant insurance policies do not automatically cover.
For example, most policies will not pay out on:
- Sewage backup in residence
- Other “Acts of God”
A separate ‘floater insurance’ may be needed to cover the cost of high-end electronic equipment, jewelry and collectibles/antiques.
A tenant’s own negligence or intentional damage may also disqualify them from payment despite holding tenant insurance.
Why is tenant insurance important?
Tenant insurance is a great way to protect your valuables and ensure you’re not hit with a massive bill in the event of an accident in the home.
It’s also a great way of building a positive relationship with your landlord or property manager. Making it clear you have tenant insurance tells the property owner you’re prepared in the event of an accident and a responsible renter, which may help you to negotiate potential rent rises and stay in the property longer.
Tenant insurance makes it easier for renters to save, safe in the knowledge their valuables are protected in the event of an accident. It’s a good way to lay the groundwork of a happy and financially healthy renting situation.
Should I invest in tenant insurance?
As there is no legal obligation to sign up for tenant insurance, whether or not you get it is entirely up to you.
Landlords may recommend it as part of the process of moving into their property, but cannot demand it as a requirement. More than anything, tenant insurance offers additional peace of mind and gives you additional cover that can help to reclaim your deposit.
Whether you’re renting as a student, young professional or family, this kind of cover and forward-thinking can help ensure a greater return on your investment and teach you a thing or to about the process of property insurance before buying your own home to live in or rent out yourself.