Planning to move into a new apartment and your friends are asking you to get renters insurance. Or you might be moving to a new house, and your landlord wants you to get a policy with sufficient coverage. Do you think renters insurance is necessary? If so, how much renters insurance can your landlord ask you to take up?
Lets read on to find out more.
Understanding Renters Insurance And What It Covers?
In case the personal belongings of the tenant are lost, stolen or damaged, then the renters’ insurance covers the expense of replacing it. In certain situations, it also takes care of the damage caused to the property of the landlord due to the negligence of the renter. This, in turn, offers extra protection to the landlord. Also, if the tenant owns any pets, the insurance claim can cover pet-related damages and injuries.
Is Renters Insurance Essential?
Before a renter leases your property, it’s advisable to run a credit check to avoid an unforeseen financial crisis. It will also help you to understand if they are capable of paying the monthly rent. No landlord would wish to have a tenant who has a financial setback that will keep him from paying the rent on time. Unforeseen situations like health concerns and job loss are unavoidable. However, you can protect your renter from property loss issues.
Protecting the personal belongings of a tenant is their responsibility. This is because some tenants consider that the landlord policy will protect their losses. It’s better to discuss the insurance coverages well ahead to avoid misunderstandings in the future.
A tenant will have lots of valuable possessions with them. To replace them in case of a flood or fire would be a substantial financial burden. However, renters insurance is capable of covering the cost of personal property loss. It depends mainly on the nature of the loss and the coverage limit present. Even though taking this insurance is not necessary by law, some landlords require their tenants to get it. Go through your lease agreement to find out if it’s essential.
How Much Renters Insurance Landlords Require?
Does your landlord require you to take up renters’ insurance? If so, your lease agreement will have a provision that specifies the amount of coverage you’re supposed to have. Generally, landlords don’t specify the personal property coverage you should have. However, they do stipulate the amount of liability coverage you must possess. It is a typical requirement to maintain a liability limit of $100,000. In some cases, the landlord can stipulate higher coverage as well.
Why Stipulate Renters Insurance?
By taking up this insurance policy, the landlord attains various benefits. Here are some of them below.
Reduces The Landlord’s Personal Liability:
In case one of your family members or guest gets injured while at your place, and you haven’t taken the renters’ insurance coverage. Wondering how to pay the hospital bills? Chances are they may try to obtain compensation from the landlord. To avoid such situations, your landlord will require you to take insurance coverage. This will make sure that your guest will turn to your insurance company to receive compensation. It will also free the landlord from having to pay court fees related to injury claims.
How Much Renters Insurance Should A Landlord Require?
In case you unknowingly caused water damage or fire to your unit, the insurance coverage of your landlord will pay for such losses. However, if you have taken the renters’ coverage policy, your landlord will be able to recover the same from your insurance company.
Protection During A Disaster:
The insurance policies of the landlord are mainly responsible only for the structural damages of the condo. Most of the tenants are not aware of this. Hence when a disaster occurs, they expect the landlord to replace their lost personal possessions and property. By having an insurance policy, you can expect the insurer to replace your damaged personal belongings.
Another cost you may come across is finding alternative accommodations in case your unit is destroyed by fire. Here also, most tenants believe that the landlord will pay for their hotel stay after a fire. However, the renters’ insurance claim covers all these expenses.
How much insurance claim should the renter take?
A renters insurance usually has a coverage limit ranging from $5,000 – $500,000. It is more than enough to replace minor property damages or personal possessions of the tenant. Some may require more coverage based on the assets they hold. For instance, some tenants may have highly valuable items like jewelry, rare collections, expensive electronic equipment. Then it’s advisable to get an insurance policy that covers all these items.
Final Thoughts
When your landlord requires you to take a renters insurance policy, he ensures that you have proper coverage for your property as well as other expenses. It also keeps you from turning to your landlord in case of any disaster.
References:
https://www.allstate.com/tr/renters-insurance/landlord-require-renters.aspx
https://www.policygenius.com/renters-insurance/is-renters-insurance-mandatory/