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5 Reasons Every Tenant needs Renters Insurance

Most people have homeowners insurance. It just makes sense. In fact the Insurance Information Institute’s 2018 Pulse Survey found that “91 percent of homeowners in the US had homeowners insurance.”

Similarly landlords insure their properties to protect themselves against damages and cover their liability. On the flip side, only 46 percent of renters surveyed had renters insurance despite it being a fraction of the cost.

Related: What you Need to Know About Landlord Insurance

What Is Renter’s Insurance?

Renters insurance is the equivalent to homeowners insurance, but for tenants. It covers a tenants belongings and offers liability coverage if issues arise.

Every renters insurance policy is different, so it’s important that the tenant understand the policy and coverage they are getting from their insurer.

With this in mind we’ve partnered up with Lemonade to help tenants get affordable renters insurance quickly and hassle free.

Get an instant Online Quote from Lemonade

1. Tenants Are Not Covered By Landlord’s Insurance

One of the main things that stops tenants from buying renters insurance is the misplaced belief that a landlords insurance covers their belongings. A Landlords insurance protects only the physical structure and any of the possessions in the rental that belongs to the landlord – commonly things like white appliances.

If the tenant doesn’t have their own insurance policy they won’t have liability coverage nor will their possessions be covered in the case of a fire or burglary.

Important: Landlord's Insurance Does Not Cover Tenants

2. Renters Insurance is Comparatively Affordable

Many tenants don’t buy insurance because they think the cost is prohibitive. However, renters insurance is one of the most cheapest and easiest kinds of insurance to obtain. 

Most renters insurance policies are in the range of $100 to $200 a year. However, Lemonade have renters insurance that starts from as little as $5 a month! 

3. Liability Coverage

If a guest comes around, slips and falls in the property, the tenant is liable. Most renters insurance policies offer liability protection to protect against this.

If a tenant doesn’t have insurance then creditors often come after the landlord to pay out – so, if your state allows it’s may be worth requiring your tenants get to get insurance.

The amount of liability protection will obviously depend on the policy that the tenant takes out.

4. Fire/Wind Coverage

Depending on the policy renters insurance can protect a tenants belongings against fire or wind damage, for example, if a tree were to fall on the property or they lose everything in a house fire.

As we mentioned before, renters insurance is pretty affordable. There were 1,319,500 house fires in the US in 2017. It is a small price to pay for peace of mind.

5. Theft Coverage

A renter’s policy can also cover theft or burglary at their property. Again, the amount and type of coverage will depend on their individual policy.

renters insurance signing

Related: What Every Landlord NEEDS to know about Renters Insurance

Why do so few tenants have renters insurance?

They Don’t Know About It

There is a misconception that a landlords insurance covers the tenants as well. And many people never really give it a second thought. They’ll certainly have car insurance and health insurance, but they might simply never even think about renters insurance, merely assuming they are in some way covered. 

It’s well worth talking to your tenants and making sure they understand they are not covered by the landlords insurance.

It’s too Expensive for Them

Renters insurance is pretty inexpensive. However, as with any insurance it’s a gamble. You are betting that something is going to go wrong and hoping for the best. A lot of people simply aren’t willing to make that bet – it seems counter intuitive. Instead they’d rather take the risk of living without insurance.

Renters insurance from $5 a month with Lemonade

It’s Not Important to Them

They may know about, but they never really consider it. There are many reasons for this, the top one being most people don’t experience issues that require them to file insurance claims. So it drifts to the back of their mind and they just keep putting off purchasing it to focus on things they consider more important.

They Believe their Stuff isn’t Worth Insuring

If you’re anything like me you have a collection of old furniture that you’ve collected from various relatives. It’s old and probably not worth much. Many renters are the same, they believe that their stuff just isn’t worth insuring.

I’d beg to differ though. Instead of thinking about the value of the possessions, think about how much it would cost to replace these items. Tenants will likely have a sofa, a T.V., a laptop, and probably some nice clothes in the cupboard. These items values can quickly rack up into the thousands.

renter insurance

What Is Not Covered By Renter’s Insurance?

Renters insurance doesn’t cover everything. For example most policies don’t actually cover the following (though you can normally get this coverage for an additional cost):

  • Backup of sewage into the residence.
  • Earthquakes.
  • Floods.
  • Other natural disasters deemed “Acts of God”.
  • Unusually expensive items i.e. Musical instruments, an expensive art collection, fine jewels.

Renter’s insurance policies also do not cover losses caused by the tenant’s own negligence or intentional acts.

Because of this it’s important for tenants understand their policies properly.

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