Tenant Insurance 101: A Guide to Coverage for Renters

Tenant Insurance 101: A Guide to Coverage for Renters

It is quite rare for a homeowner to avoid purchasing homeowners’ insurance. Unfortunately, this is not the case when it comes to Renters Insurance. There seems to be a popular misconception among tenants that the owner of the building already has insurance and that as a renter you are included in that coverage. It is often only after a fire, flood, or another unexpected occurrence that tenants realize this is not the case.

What Does Tenants Insurance Cover?

Let’s say for example that the building you are renting an apartment or condo in catches fire. You are grateful that you have made it out and did not suffer any personal injury. The next thought is, what do I do now, where will I stay tonight, and what about my personal property? You now realize that everything you own like your phone, laptop, and furniture are all lost, you do not even have a change of clothes or a toothbrush! If you do not have renter’s insurance, everything you just lost will have to be replaced at your own expense. You may also be living and working in a city where you have no family or close friends who can offer you a place to stay.

The main components of renters/tenant’s insurance include:

  • Contents – This can include personal items in your rental unit that have been damaged or stolen such as small kitchen appliances, TV, computer, furniture, etc. It is important to keep an updated contents inventory as well as receipts for purchases, as your claims adjuster may request them before reimbursement. It is also a good idea to take pictures of larger items in your apartment, condo, or even a room you may be renting in a private home.
  • Living Expenses – It can be quite expensive to rent a comparable apartment to live in while your own unit is being restored/repaired. There is usually a specific, total amount that your insurance will cover in such cases, so be sure you understand exactly how much they allow before renting your temporary apartment.
  • Third-Party Liability – Your tenant insurance can also cover you should someone injure themselves, or their personal property, while in your apartment and they seek to recoup their loss or sue you for their injury. Another important part of this coverage includes damage you cause to other units due to a fire that spreads to other units or the result of a flood. The expenses can mount quite quickly if one or more third parties decide to sue you for such damages.

white and yellow clean roomPhoto by Norbert Levajsics on Unsplash

Renters have several common misconceptions about insurance, making them believe they do not require tenant’s insurance. These include:

  • My Landlord Already has a Policy – This is a very common myth since the owner’s policy only covers the building and not any of your personal belongings.
  • I Do not Have Enough Stuff to Worry About Insurance – Once you look at your contents inventory list, you begin to realize just how much it would cost to replace everything. The simple cost of replacing your clothes and toiletries can add up very quickly. Then consider items such as furniture, bedding, perhaps you have a bicycle or children’s toys, electronic devices. Compared to the yearly cost of a renter’s insurance policy, having to replace everything you own is a significant expense.
  • My Basic Coverage is Quite Adequate – Even though you may have a basic renters insurance policy, are you certain that it will cover everything you own including temporary living expenses, jewelry, or artwork?

The sad truth about losing everything you own is that there will always be certain items that have enormous sentimental value and can never be replaced. Having to deal with such emotional loss on top of not being able to replace your most basic items or afford temporary living accommodations for your family is not a prospect that anyone should have to face. When you put all this into perspective, a mere $20 to $40 per month suddenly becomes a worthwhile and welcome living expense.

A good place to start is by completing a Contents Inventory List. An experienced SeaFirst agent will sit down with you to help you understand the coverage that will best suit your personal needs. They will also let you know about certain items that may require additional coverage such as jewelry, artwork, etc.

The most important take-away from this is that it is not the amount of stuff you have but what it will cost to replace everything you own if you experience an unexpected disaster. By comparison, renter’s insurance is a small price to pay for such peace of mind.