What Is Renters Insurance?
Renters insurance is a policy available to people who rent out a property. Since the tenant does not own the actual property they are renting, this insurance protects the contents of the tenant’s apartment and offers liability coverage if issues arise. Every renters insurance policy is different, so it is important for the tenant to understand their specific policy, including the amount of coverage, as well as what acts and events, are covered.
4 Reasons Tenants Don’t Purchase Renters Insurance
- They Don’t Know About It– Many tenants don’t purchase renters insurance because they do not know it exists. They may have life insurance and car insurance, but they think insurance relating to the home is only for homeowners, not renters.
- Cost– Some renters do not purchase insurance because of the cost. They believe it is too expensive and would rather risk living in the property without it.
- Not a Top Priority– Some tenants know about renters insurance, but put off purchasing it to focus on things they consider more important.
- Do Not See The Value– A tenant may think renters insurance is a waste of money.. They would rather take the risk of something bad happening without being properly insured than paying the money so that they are covered.
What Is Not Covered By Renters Insurance?
A renter’s insurance policy does not cover everything. The tenant will want to purchase separate insurance for expensive items, such as an engagement ring because the full value will never be covered by a renters insurance policy. In addition, the renters insurance likely does not cover damage from flooding. If flooding is a concern, a separate flood insurance policy must be purchased.
Making Tenants Aware of Renters Insurance
Landlords should tell their tenants about renters’ insurance. You should include a renters insurance addendum in your lease agreement that makes it clear that the tenant and the tenant’s property are not covered under your insurance policy.