Studies show that about 60% of renters do not have a tenant or renter’s insurance policy. This is unlike homeowners who almost always get insurance on their properties. You might think that as a tenant or renter, you do not have to take an insurance policy, but you couldn’t be more wrong.
You might not have to take a policy out on the home seeing as it is not yours but what about your properties? Those need to be insured and that is why there is such a thing as Tenant or Renter’s Insurance policy.
In this review, we will examine what Tenant Insurance is, why you need to get one and so much more. Let us begin.
What Is A Tenant Insurance?
Tenant Insurance is designed specifically for home renters. The insurance has two types of policies that you can take out as a tenant, Tenant Liability, and Tenants Content Insurance.
These two policies cover two different things.
The Tenant Liability insurance is for tenants that are looking to cover for accidental damages to their landlord’s property. If you want to cover for damages to the pipes or a broken floorboard or any sort of damage to the home, then taking out this insurance policy is your best bet for minimizing costs.
Liability coverage also extends to slips, falls, and injuries to guests while in your rented property. If you have to pay for treatment or are sued, then a tenant’s insurance will help limit how much you have to take out from your personal savings.
The Tenant Content Insurance is for your valuables and other possessions. Taking out this insurance will ensure that you are covered against home fires, theft, and any other kind of loss or damage to your property while renting a home.
Why Do You Need A Tenant or Renter’s Insurance?
Now that you know what the insurance is like, it is time you know why you need to take out one of these policies.
Most people avoid taking out tenant insurance because their landlord already has insurance coverage. Well, your landlord might have insurance on “his” property but what about your properties? What happens if a thief breaks in, there is a home flooding or a fire breaks out?
You might also think you don’t have much of anything to protect. Well, what about your laptop, your clothes, your TV unit or basically anything that you have in the home these are all things that you have to minimize the cost of replacement or repair when there is damage or an accident.
Tenant Insurance also protects you from what I like to call “guest accidents” in the home. In situations where a visitor has a slip and falls in your home, you may have to pay for damages. Tenant Insurance will help you relieve the financial burden of such a situation.
Thinking that tenant insurance is expensive is also another reason you might want to avoid taking out one. We will discuss how much the insurance costs later on in the review but I can assure you that a Tenant Insurance costs way less than most other insurance policies.
What Else Does Tenant Insurance Cover?
We have already established that tenant insurance will cover you for property or content loss and damage, what other things does the insurance cover?
Additional Living Expenses: In situations where your home under repair and you have to live away from home at a hotel or something, then Tenant Insurance will cover these costs. This includes hotel bills, restaurant bills, or even the costs of moving out of the home. The coverage is generally for any unexpected costs that you might have to incur as a result of living outside your apartment.
Liability Lawsuits: As I already mentioned, you might have a visitor getting injured in your rented home. In situations where you are successfully sued by such a person, tenant insurance will help you cover up for the amount you might have to pay such a person. Some insurance companies cover up to about $1 million of these fees.
Any costs that you might also incur during such a lawsuit is covered by the liability aspect of your tenant insurance policy. The limit for such a liability coverage can be extended to about $2 million with some Insurance Companies. (For more information, check here)
You should already know that the Tenant Insurance covers you for property or content damage. The costs might seem minimal at first, but once you start summing them up, then you end up with a huge lump sum of money. Having Tenant Insurance will help you minimize how much you would have to pay out of your own pocket.
You should know that you might have to provide receipt and or pictures of whatever property that you are trying to make a claim on. This is to help insurance companies ensure that you are not just piling up property or content that was not originally in the home.
What Is Not Covered By Tenant Insurance?
There are some things that you should know about tenant insurance. The policy will protect you for content, additional living expenses, or liability lawsuits, but it does not cover you for when you rent out your rented apartment to someone else.
If you sublet your living space, whether by Airbnb or any other means, then you will rarely find a policy that will cover you for such a situation. The renter will have to take out their own tenant insurance policy or else you might have to pay for the risks on your own. If there is an accident, you will most likely be held liable for such an incident.
How Much Does Tenant Insurance Cost?
I already mentioned that tenant insurance is quite affordable and cheap. It is in fact one of the cheapest insurance policies that you can take out.
Your insurance costs may vary depending on
What are you insuring?
Where are you living?
Which insurance company are you using?
How was your apartment or unit constructed?
Your claims history
You should look around with a few companies and you will be able to pick the one that suits your needs and your pocket the most.
Depending on the things listed above, then you might end up paying from between $10 to $30 per month for your insurance costs.
The price may vary depending on add-ons to your policies. You should also know that there are limits on specific items like artworks, bicycles, and jewelry. There is also a chance that your properties may go beyond your coverage, in such situations you should add endorsements to cover such situations.
Tenant Insurance – Optional Add-ons
Some Tenant Insurance companies like HomeLet provide add-ons that you can add to your policies. These add-ons are considered as extras for your policy and will help you tailor your policy to suit your needs and requirements even more.
Some add-ons that you can possibly take out with your tenant insurance policy with HomeLet include
Accidental Damage Extension: this add on provides additional coverage specifically for accidental damage to your possessions especially your electrical equipment such as TVs and computers. The add-on may not always extend to cover your mobile device and you might have to take out a policy specifically for mobile phones.
Specified Personal Belongings: This is specifically for your property that is on the expensive side and you take them out with you on a daily basis. Such property includes but is not limited to engagement rings, and musical instruments.
Unspecified Personal Belongings: this covers for personal possession that you have to take out of your home but remain within Europe. It also covers your property anywhere in the world for up to sixty days.
Pedal Cycle extension: HomeLet also provides optional coverage for your pedal cycles even when you take it out of your home. If you cycle on a regular basis, then this option is for you. Your pedal cycle is also protected anywhere within Europe and all over the world for a period of 60 days in any one period of insurance.
Personal Legal protection: If you have legal issues, Homelet will also provide legal assistance in cases that are connected to your rented apartment.
For further information on these add-ons, you can check here. It will answer any and all of your questions about these add-ons.
Claims and How Your Items Are Valued In The Tenant Insurance
If you do have to make a claim with your tenant insurance company, it is important that you know how you might receive payments on your claims.
Two sets of criteria are used to determine the value of your items. These two criteria are the Actual Cash Value and the Replacement Cost. Let’s talk about the replacement cost first.
The replacement cost is simply how much it would cost to replace any of your damaged properties. It does not take into account how much you bought the property, instead, it focuses on how much a replacement would cost as of the time of need.
The Actual cash value is a bit more technical. It is the amount you would pay for whatever item today minus the depreciation. The actual cash value is the replacement cost when you have accounted for depreciation.
Simply Actual Cash value = Replacement Cost – Depreciation.
Once your insurance company has decided on paying out your claim, they would use either of these two to determine how much you would be receiving as payment for whatever items you have insured.
What About Deductibles?
Any amount of money that has to be paid towards a claim before the insurance company starts paying off the debt is known as a deductible.
If you have an accident at home and your damage total comes to about $20000 and you have a deductible of $5000, then the tenant insurance company would hold off on paying you till you have paid off your $5000 deductible. Put simply, your deductible is whatever part of your damages you have to pay off before you can receive payments from your insurance company.
Each insurance company has various types of deductibles plans for you to choose and you are free to pick whichever you find the most suitable for your tenant insurance needs.
Getting Ready For A Tenant Insurance
If you are thinking of getting a tenant’s insurance, there is one important thing that you must do before selecting a plan to work with and that is, taking inventory. It might like a chore and totally unnecessary, but I can assure you that taking a complete inventory of all your stuff is worth it.
The best way to get started on this is to ask whatever insurance company that has your fancy if it has a home inventory list resource. This usually comes as a brochure, an e-document, or sometimes it is available on the company’s mobile app.
Armed with the inventory checklist it is time to take inventory. You will have to go through each room and check your garages, basements, or attics if any, and take note of what is in there. If there are similar items then you should group and price them as multiple units of the same items.
For instance, if you have four bottles valued at $10 each, then the total price would be $40. Do this kind of grouping for each and every valuable item in your home.
Once you have the items grouped and accounted for, it is time to take pictures and make videos. You should take pictures and make video recordings of each room and make sure that your most valuable items are prominent in these. If possible, make sure that labels that describe the items are easily available.
This pictures and/or videos will help you provide adequate and substantial information about whatever claims you have file later
You should also make sure that you have as many copies of receipts as possible. Having this will help your insurance claims go faster and help you avoid having to wait a long time before your loan application is rejected or accepted.
How To Get A Tenant Insurance Online?
Once you have your inventory list, it is time for you to get tenant insurance. It is advisable that you keep your inventory safe and well protected from damages. If possible, make an electronic copy of the list and store it in an external drive or on cloud storage. This will help you avoid misplacing the list in the first place.
You should also try to update the list as frequently as possible especially when you make new purchases and do away with your old things.
If you are looking to get tenant insurance, the steps vary from insurance company to insurance company and it is best to take a look at a lot before settling for one. If you are looking to compare prices amongst different insurance companies then you should check out
The process for getting a tenant insurance quote from Ratehub is pretty simple and almost anyone can use the site to get quotes.
The process is
You sign up
You identify your property
You give a bit of information about yourself
You will be asked to review the construction details of your home
Only after that will the quotes be available and you get to choose the one that you want.
There are also banks that offer tenant insurance policies, so you never can tell, your current bank may have something like this available for you to use.
How To Get The Tenant Insurance For A Low Price?
Now I know I already said the tenant or renters insurance is very cheap, but sometimes, you want prices lower than they actually are, so how do you go about this? Well here are some things you could try out to get your insurance premiums as low as possible.
Compare the premiums offered by various companies and pick the cheapest.
Go for bundle polices. Chances are you get a discount if you take out insurance on something else, like a car alongside your tenant’s insurance. Most people get both auto and homeowner policies.
Increase your deductible. I already explained what deductibles are. It only makes sense that if you are willing to take a larger share of the repair costs that your premiums should go as low as possible
Talk to the customer care workers: You can always just decide to ask about discounts that the insurance company has. Once you know the discounts that every company offers then you get to pick the ones that ask for the least amount of money as a premium.
As a tenant or renter, the chances of having to pair for damages or being held responsible for accidents and such around the home truly exist. Having a tenant insurance policy will definitely have you sleeping better at night.
You should not waste any more time before you go get tenant or renter’s insurance.
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Sagar Sridhar is a personal finance blogger from Canada. His genuine passion for personal finance coupled with his unique style of writing is what stands out. Professionally, he is a computer engineer, agile certified and has a master’s degree in Project Management. His writing has been featured or quoted in the leading Canadian publications such as Credit Canada and many other personal finance publications. While he is juggling between his day job and blogging, he is the main author on this blog and has miles to go before making the final pit stop.