Many renters are under the impression that they don’t need any sort of insurance. After all, the guy who owns the house has insurance, and that’ll cover them in case the place burns down.
But without insurance, renters are taking a huge risk. Here’s why every renter should have tenant’s insurance.
Right away, let’s squash the myth that the owner’s insurance will cover you and your contents inside of a rental. Nothing could be further from the truth.
The owner’s policy only covers the owner’s things. Since a rental won’t have any of the owner’s things in it, the policy just covers the condo itself, and not the tenant’s possessions. If there’s a fire, or some other catastrophic event, the only person getting any compensation is the owner.
It’s the same thing if somebody breaks into a rental and steals something that belongs to the tenant. Unless the tenant has tenant’s insurance, there’s no getting compensated for the item from insurance. The renter would just be out of luck.
It’s cheap, too
Depending on any number of factors, the price for a homeowner to get insurance can go from a few hundred to a couple thousand dollars.
Tenant’s insurance is much cheaper, since it doesn’t cover as much as a homeowner’s policy. Think of it this way; if a house burns down, a homeowner’s insurance policy is going to pay out enough to replace the items inside, plus build the homeowner an equivalent house. Most homeowners will just take the cash and buy a new place, for obvious reasons.
The tenant’s policy just covers the contents inside the house. Sure, a renter might have a pretty nice laptop, or a big TV, or even an expensive collection of college sports memorabilia, but they’re all going to cost a whole lot less to replace than a brand new house.
That means that a tenant’s policy will often cost a renter just $100 or $150 per year. That’s not much to pay to protect all your worldly possessions.
Say a tenant was smoking in bed, which caused a fire. They managed to escape, but the rental house burned to the ground. What happens then?
The owner’s home insurance would cover the damage, so they’d be in good shape. But once the owner’s home insurer finds out the truth, there’s a very real chance they could go after the tenant in court, especially if the rental property had very strict rules about not smoking indoors. Tenant’s insurance would protect the renter if something like that was deemed to be the tenant’s fault.
Tenant’s insurance can help protect a renter from other liabilities too. If somebody injured themselves while at your house, tenant’s insurance would take the liability away from the renter.
There’s one other important thing tenant’s insurance covers, and that’s water damage. Damage from overflowing tubs or burst pipes is becoming more and more common, especially in giant condo towers. And if it’s your tub that overflows, you’ll be glad you sprung for the insurance.
Is it worth it?
For the price, I’d say tenant’s insurance is worth it. If you’re looking to get covered today, head on over to our renter’s insurance page to get quotes and compare costs to help you find the cheapest home insurance.