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Renters' Insurance and What it Covers

Updated on July 13, 2013

Renters' Insurance

Most renters believe that the Landlords insurance covers their personal belongings. That is not the case. The Landlords insurance only covers structural damage to the property, inside and out. So if a tree falls on the roof of the property during a storm then the house floods and the tenant’s personal property gets damaged or destroyed, none of that is covered under the Landlords insurance. However the roof is and so is the carpet (that the rain water ruined).

In other words, if lightning hit the property and burned it down to the ground the tenant would be left with nothing but the cost to rebuild property would be covered.

Average Cost of Renters Insurance

Renters insurance protects the renters’ personal property against damage and theft. It is also very inexpensive. According to the NAIC, the average cost for renters insurance is only $15 to $35 per month. Not only does renters insurance cover the renters personal property, it also covers anyone that may get injured while in the property and any damage that may occur to the property whether it be by the tenant or a guest of the tenant.

When it Rains it Pours

Picture this: You (the renter) are having a Housewarming Party. Everything is fine and dandy. The guests are having a great time, the food is outstanding and the drinks are flowing. The music gets a little louder and everyone is dancing and having a great time. You are happy because all your guests are having so much fun at your party. Well…Things are about to change. Your best friend (Let’s call him Charlie) has two left feet. He’s had a little too much to drink and is dancing like Fred Astaire…or so he thinks he is. It’s more like the “Curly Shuffle”.

Curly Shuffle

He trips over his second left foot and lands on your new glass dining room table, knocking it over along with all the food and red Kool Aid. Your dining room table is destroyed along with your fine china, crystal (Kool Aid) glasses. Not to mention the carpet and the picture window. The picture window broke because your other friend (let’s call him George) saw what was happening and ran backwards out of the way to avoid getting hurt. Luckily no one did get injured but damages now are well into the Thousands and had you had renters insurance for a measly $15 to $35 and perhaps a $100 deductible you could have saved thousands. (A higher deductible usually gets you a lower insurance premium). Not to mention having to call Mr. Landlord and telling him his carpet is ruined and so is his picture window. That can be as much as three months’ rent. Ouch!

A bit Extreme

I know this example is a bit extreme but I wanted to make a point. Is renters insurance worth it? You do the math. Personally I think it is. As a Landlord you would be doing your tenant a great injustice not mentioning it to them. I suggest renters insurance to all my tenants at the signing of the lease agreement. After two weeks I also mail out a flyer explaining renters insurance and what it covers. The rest is up to them.

Wikepedia definition of Renters Insurance

Renters' insurance

From Wikipedia, the free encyclopedia

Renters' insurance is an insurance policy which provides most of the benefits of homeowners' insurance. Renters' insurance does not include coverage for the dwelling, or structure, with the exception of small alterations that a tenant makes to the structure. This provides liability insurance. The tenant's personal property is covered against named perils such as fire, theft and vandalism. The owner of the building is responsible for insuring it, but bears no responsibility for the tenant's belongings.

General Requirements

Many large and medium-sized rental properties include a requirement in their lease that tenants hold renters' insurance.[1] If the tenant damages the premises,[2] the landlord and other tenants can recover against the perpetrator's insurance. Renters' insurance also informs the tenant that the landlord is not responsible for their belongings and that the tenant has coverage for them.

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    • TycoonSam profile image
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      TycoonSam 4 years ago from Washington, MI

      Audrey,

      Thank you for sharing!

    • TycoonSam profile image
      Author

      TycoonSam 4 years ago from Washington, MI

      Barbergirl, thanks for visiting and commenting!

    • AudreyHowitt profile image

      Audrey Howitt 4 years ago from California

      Useful! Sharing this!

    • barbergirl28 profile image

      Stacy Harris 4 years ago from Hemet, Ca

      Interesting. We have rented a lot of houses but we have never actually had renters insurance. We have been lucky so far, but you just can never be too sure! Great advice and glad to see you are passing this information on to your tenants!

    • TycoonSam profile image
      Author

      TycoonSam 4 years ago from Washington, MI

      Michael...Cheers!

    • TycoonSam profile image
      Author

      TycoonSam 4 years ago from Washington, MI

      Tammy, Thanks for stopping by and commenting.

    • ithabise profile image

      Michael S. 4 years ago from Winston-Salem, NC

      Well-written and easily understood. I know that many complexes require renter's insurance these days--a good thing. Cheers!

    • tammyswallow profile image

      Tammy 4 years ago from North Carolina

      Renters insurance is so important and so few have it. It can change your life if you don't have it. Everyone must read this. Very informative and well done!

    • TycoonSam profile image
      Author

      TycoonSam 4 years ago from Washington, MI

      Excellent point tips!

    • tipstoretireearly profile image

      tipstoretireearly 4 years ago from New York

      The part of renter's insurance that covers anyone injured on the property is what really makes rental insurance important. Stuff can be replaced easily enough, but paying medical bills is another matter.