Understanding Your Role As A Tenant With Insurance

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Most apartment renters now have to get used to an additional living expense, which is essentially liability insurance. Apartment owners and managers are getting tired of having to pay the cost themselves, so they are requiring that tenants acquire their own insurance. In some cases, landlords won’t even rent an apartment unless the tenant provides proof of insurance. Other landlords are also telling their tenants to acquire coverage, and some are even offering options to help them get it.

This is mainly due to the rising costs of insuring apartment properties, because they have a higher exposure to slips, falls, fires, and even robberies and assaults, than any other type of commercial property. Owners and managers alike are seeking to have the tenants bear more of the responsibility and costs for their units. There have even been advances in technology for software programs to help renters get insurance quickly.
These new programs allow the owners of apartments and managers to track who has insurance and who does not. Surprisingly enough, a lot of renters don’t maintain liability insurance. More than two thirds of the 81 million people living in rental properties don’t maintain any type of renters or liability insurance.

A lot of people make the mistake of thinking that the landlord’s policy will recover or replace their personal items if they’re damaged or even stolen. But, the landlord is in no way responsible for any of your personal items unless their negligence was the cause of the loss.

There are two types of renters insurance: liability and contents insurance, and they are usually sold together. As for liability insurance, it covers injuries that were suffered in an apartment unit from things like falls or slips if the tenant is held liable. It will also cover a tenant in the event that they are sued and held liable by the landlord for damages to the apartment that were caused by the tenant themselves.

Content renters insurance will cover the tenant’s personal property which can include anything from television sets, clothing, appliances, furniture, and even temporary housing costs. There are usually limits on superficial items such as cash, silverware, collectors, items, documents and jewelry, but if they want to, a renter can purchase a special form of insurance to cover those items. Renters insurance does not cover damage from weather related floods though.

Right now, the average cost of renters insurance is about $12 a month or $144 a year for about $30,000 worth of property coverage and $100,000 of liability coverage. There is also a deductible of about $250 on average. A tenant can also receive discounts if they have risk-reduction equipment like security-alarm systems or double-bolt locks.

According to tenant lawyers, landlords can put requirements in their lease contracts, except for rent regulated apartments. But the question stands: should every renter get insurance? A director of insurance with the Consumer Federation of America says that someone who is young and just starting out probably doesn’t need to purchase renters insurance, as they haven’t really accumulated much stuff like belongings and furniture. Now, someone who is older and who has a lot of personal belongings such as collectibles, art, or antiques, should probably purchase renters insurance if they value their items.

Now, if you are a consumer who is considering purchasing renters insurance, you can visit the websites of most insurers to receive a rate quote. But, price should not be the only determining factor when it comes to choosing a policy and an insurance company. It is also suggested that renters shop for insurance and check the complaint records of the insurance companies. The National Association of Insurance Commissioners keeps information on insurance carriers including their complaint history. You can visit their website at www.naic.org. From there, you just click on the consumer information source, type the state and what the carrier’s name is, then they should pop up under the property/casualty menu.

Sources

StateFarm
Farmers
NAIC

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