“Why do my tenants need to buy tenant’s coverage?”
We hear this question often from our landlord clients. The answer is twofold.
Tenants should care about purchasing tenant’s coverage (a.k.a renter’s insurance) because a landlord’s insurance policy does not cover the tenant’s belongings or a tenant’s personal liability.
Landlords should care about their tenants having separate coverage because when a tenant carries a renter’s policy, the landlord’s insurance company would be able to pursue a claim reimbursement from the tenant’s policy when the claim was caused by the tenant.
Confused? Read on for some examples.
It is a common misconception (by tenants and landlords alike) that the landlord’s insurance policy will provide coverage for the tenants. Unfortunately, this is not the case. Sorry! For example, if a fire causes damage to the tenant’s belongings or if someone breaks into the tenant’s home, the only way the tenant would have coverage for his/her property is via a renter’s policy. Also, the renter’s policy covers the tenant if a liability issue arises. For instance, if the tenant has friends over for a party and one of the friends slips and falls, the renter’s policy provides liability protection for the tenant if he/she is liable for the friend’s injuries.
There are also many claims that cause damage to the landlord’s property, the dwelling itself, but the claims were actually caused by the tenants. For example, a tenant may cause the washing machine to overflow, have a leaking waterbed, let a child play with matches, or leave an unattended candle which causes a fire. While this type of damage may be covered by the landlord’s policy, if the tenant has renter’s insurance, the landlord’s insurance company can be reimbursed.
If you are a landlord and are wondering how to tell your tenants about renter’s insurance, you are in luck! We have drafted a letter for landlords to give to their tenants, which simply addresses some of the issues discussed in this blog. If you are a tenant and want to learn more about how to purchase a policy, you are also in luck! We can definitely help you with that, and can “guesstimate” that this piece of mind may cost you approximately $150-$250 per year. For a copy of the landlord’s letter or for an exact quote on renter’s insurance, give us a call today at 723-8510 or visit us at www.loiselleinsurance.com.