While homeowners are often required by their mortgage lender to protect their investment with homeowners’ or property insurance, renters are not held to the same standard. Since renters don’t own the building or property, they often erroneously overlook this type of insurance, leaving the responsibility to the property management team or the building’s owner.
As a renter, it is easy to overlook the numerous aspects of a living space that can be covered by rental insurance, including personal belongings that may be lost due to damage or theft, liability for accidents in your home, and temporary living expenses if you are displaced.
Here’s a brief overview of renters’ insurance and what it does and does not cover.
What’s Covered Under a Rental Insurance Policy?
There are a few main components that are covered under a rental insurance policy, including: belongings such as furniture, clothing and electronics; personal liability in the case of injury; and additional living expenses while your rental is uninhabitable.
Personal Belongings
Rental insurance often covers the cost of repairing or replacing personal belongings, such as furniture, electronics, and clothing, if they are damaged or stolen due to a covered event. A covered event will be specified in the policy, but traditionally includes fire, smoke, water damage from a burst pipe, theft, and vandalism.
Personal Liability & Guest Medical Payments
Should an unfortunate event occur on the rental property, renters’ insurance would protect the policyholder if they are found legally responsible for bodily injury or property damage to another person.
This coverage could include instances such as if their pet injured (bit) someone, accidental property damage, or an injury that occurred on the property, such as a slip and fall.
Additional Living Expenses or Loss of Use
Should the rental unit become unlivable for an extended period due to fire, windstorm, hail, smoke damage, or other covered cause, additional living expenses may accrue. These could include the costs of staying in a hotel, restaurant meals, or the expense of temporary storage for your belongings while the unit is repaired.
What’s NOT Covered Under a Rental Insurance Policy?
Several events or items are not covered on a rental insurance policy. Natural disasters, such as a flood or earthquake, are generally not covered and could need a separate policy for flood insurance (National Flood Insurance) or a separate endorsement or policy.
Other items that are not generally covered in a standard rental insurance policy include:
- The landlord’s property
- Roomates property
- Pest infestations
- Mold
- High-value items (jewelry or art)
- Vehicles or
- Intentional damage
It’s always a good idea to be prepared for the worst and hope for the best. Renters’ insurance can help protect your belongings, personal liability level, and allow for alternative living arrangements should there be a loss of use of the rental unit. Need more guidance on renters’ insurance or property management issues? Contact us at Thayer & Associates.