Have you ever wondered why you need tenant insurance if you don’t own the space you are living in? It is a common misconception that a landlord’s property insurance will cover the belongings of their tenants. However, the insurance a landlord has on their property only covers damage to the building and any items in the building that they personally own. Such as appliances in the spaces they rent to tenants.
As a tenant, it is in your best interest (and often a requirement of your rental agreement), to purchase a tenant insurance policy.
What Does Tenant Insurance Cover?
The main coverages of a tenant insurance policy are: Personal Property, Additional Living Expenses, and Liability. Let’s look more closely at the big three coverages and why they are so important:
Personal Property
Personal Property includes your clothing, furniture, linens, kitchenware, electronics, books, etc. A tenant policy provides coverage for these items in the event of a loss due to an insured peril. Examples of commonly insured perils include: fire, water damage, and theft.
You may think you don’t own a lot of “stuff”. However, if you take a moment to think about how much each item would cost to replace if you had to buy them all over again, you’d be surprised by how quickly the cost can add up!
Additional Living Expenses
If there was a fire or major water damage in your apartment building (or other living space), could you afford to pay for temporary accommodations? A tenant insurance policy covers this cost, so you don’t have to worry about finances in an already stressful time.
Liability
Did you know that you are responsible for your actions (accidental or otherwise) and any damage they may cause? This responsibility extends beyond the space you personally rent, to include all areas of the building you live in. In fact, you can even be held responsible for the actions of your guests.
For example: let’s say you accidentally leave the water in the bathtub running, causing it to overflow. You live on the third floor of an apartment building. In addition to damaging the bathroom in your apartment, the water seeps through the floor and causes damage to the ceiling in the unit below you.
Your landlord could sue you for the cost to repair the damage in both your apartment and the unit below. In this type of situation, your insurance company would step in to cover the cost of the repairs and handle any legal proceedings on your behalf.
Learn More
Read our article: 7 Everyday Insurance Terms You Should Know, for an explanation of the terms “loss”, “peril” and “liability”, as well as other common insurance industry terms.
This article is intended for informational purposes only. It is recommended that you speak with your Agent, Broker or Insurer for accurate information pertaining to your specific insurance policy and/or individual insurance needs.