Many people believe home insurance is strictly for homeowners, but that’s simply not true. In fact, most landlords require their tenants to be insured before moving in. Insurance is ideal in either situation, find out the difference between home insurance and tenant insurance to learn more about what each policy covers and does not cover.
If you’re a first-time renter that’s unsure about how insurance for tenants work, and whether it’s really necessary, keep on reading.
What is tenant insurance?
Also known as renters insurance, this important coverage protects those living in a leased house or apartment. Life is full of situations beyond our control. If your residence is affected by a fire or break-in, for example, renters insurance can come in very handy.
Typical coverage includes three basic benefits that will protect you after a covered loss.
This will cover the cost of replacing damaged or stolen belongings, up to the limits of your policy. In the event of flood, water leakage, fire, theft or vandalism, renter’s insurance can help protect your belongings while any property damage caused by the incident will be covered by your landlord’s policy. Items can include furniture, clothing, and even jewelry. On the other hand, if you’re covered by homeowner’s home insurance while renting, it may not cover your belongings and if accidents occur, you may have to pay out of pocket for damages.
If a guest is injured while visiting your home, you could be held responsible. Liability protection will cover your guest’s medical expenses, property damage, and even legal fees if applicable.
Your home may become temporarily uninhabitable after a covered loss. Renters insurance can take care of additional expenses, such as hotel and food bills until you’re able to move back in.
Tenant insurance generally protects what’s inside the home, and don’t typically address what happens outside the home. External areas are often the responsibility of the landlord — as are damages to ventilation units, electrical wiring and heating systems. If you’re unsure, ask your insurance advisor what’s covered under your policy.
What happens if I don’t have tenant insurance?
You won’t be breaking any laws by not having renters insurance, but that doesn’t mean it’s a smart idea to ditch it altogether. Tenant insurance is completely optional but without this important coverage, you could be risking everything you own — plus your overall quality of life.
From family heirlooms to expensive electronics, think of all the valuables in your home. If there was ever a fire or burglary, these things would be destroyed or stolen. Without tenant insurance, you’d receive no financial reimbursement for your loss.