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Making the Case for Tenant Insurance

June 10th, 2015 garnerproperties
Tenant Insurance

In recent years, housing trends have been skewed more in favor of renting rather than owning. This has also meant a dramatic rise in the need for both property owners and renters alike to get insurance to cover themselves in case of theft, emergency or disasters that could abruptly damage or destroy property or belongings. Many property owners are now requiring their tenants procure a renter’s insurance or tenant insurance policy and provide proof as part of their residency.

According to a poll conducted last year by the Insurance Information Institute, while 95 percent of property owners carried insurance on their homes, only 37 percent of renters questioned carried a rental insurance policy. While this number has grown in recent years, it still means that nearly two out of every three renters have no protection at all if something were to happen to their apartment or rental home.

Interestingly, the same report showed that rental insurance rates have actually declined from 2004 to 2012. Average policy rates, according to data provided by the National Association of Insurance Commissioners, fell from $195 in 2004 to $187 in 2012, while homeowner policies rose from $729 to $1,034 during the same time frame. With rental policies so cheap – just over $15.50 per month, based on those averages – it’s quite surprising that more renters are choosing not to get coverage.

Tenant InsuranceOne consideration may be the commonly held belief that a property owner’s insurance would cover a tenant. However, homeowners’ policies typically only protect the owner from damages that may occur to the building from accidents at the home, like water damage from burst pipes or fire damage. While an owner can often recoup some of the costs of making necessary repairs following such an issue, uninsured tenants who may have had their items damaged or destroyed by smoke or spilled water would not have any protection.

Owners should also consider making tenant insurance a requirement for another reason: tenant-caused accidents. Most rental policies offer coverage to protect possessions as well as liability coverage. This means that if a renter accidentally causes a fire at your property through careless or neglectful behavior, you would be able to make a claim on their insurance policy. This also is an additional level of protection for tenants, as even the most careful and attentive person can make a simple mistake that becomes a serious – and expensive – accident.

Considering the potential alternatives, like lawsuits and other legal hassles, making sure that all parties are fully insured and protected adds peace of mind for both tenants and owners alike. Hopefully you won’t need to use your insurance, but no matter what may or may not come, you can rest assured that you’re all covered.

Written by garnerproperties

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