Have you ever rented your residence and been told by the landlord or leasing office that you must purchase renters’ insurance?
Did they offer you renters insurance through their company or the company they work with?
Did they tell you why you are being required to buy it? Why do they do this?
IF YOU PURCHASED A POLICY THROUGH YOUR APARTMENT COMPLEX OR RENTAL COMPANY CHANCES ARE IT PROTECTS THEM BETTER THAN IT PROTECTS YOU!
We had a real call yesterday from someone saying “I bought a policy through my apartment complex and the AC went out in our entire building. It has been out for 10 days and they still have not fixed it. My apartment now has mold everywhere. Is this covered by my renter’s insurance?”.
This happens all to often. Let’s get a few things straight.
Why do Landlords require you to buy Renters insurance?
REDUCE THEIR LIABILITY
Landlords require renter’s insurance to reduce their liability in legal claims. Pretty plain and simple.
Renters insurance provides liability coverage (most of the time it is included in the base policy). This liability coverage can be used in the event the tenant is careless or causes damage (each instance is different).
Keep in mind there is no clear-cut line that states what is covered and what is not, everything is open to investigation.
Landlords want to make sure that if anything happens on premises, because of some sort of negligence by the tenant, the claim is paid for by your renter’s insurance policy.
Reduce Claims on their Landlord Policy
Simply to reduce the amount of claims made on their landlord policy they have in place. The more claims on their policy the higher the premium will be. You can see more information on a typical Landlord Policy here.
Relocation Expenses or Loss of Use
This coverage will might pay for a tenant’s extra expenses and sometimes put them up in a hotel room in the event damages occur to the residence that don’t allow the tenant to live there during the repairs.
This cost can fall on the landlord if it is caused by something they are responsible for.
Landlords do not want to have to come out of pocket in the event your personal property is damaged by something that happens on premises. Renters insurance should have “Personal Property Coverage” included in it. IF YOUR POLICY DOES NOT HAVE THIS YOU NEED TO REEVALUATE YOUR POLICY IMMEDIATELY.
If your residence burns to the ground this is the coverage that is going to buy you all NEW stuff (Clothes, furniture, electronics, and everything else you own).
Most policies provided through an apartment complex or landlord likely have minimal if any coverage at all for your personal property.
Coverage to look for in a Renter’s insurance policy:
Personal property coverage: Should be AT LEAST $20,000.
Water Backup / Sewage overflow: This covers if there is an incident where water overflows from toilets or sinks and damages your property it should provide some coverage. This should be at least $10,000
Mold / Fungi Remediation Coverage: This is called something different with every insurance carrier. This should provide coverage in the event there is mold damage caused by a covered event. KEEP IN MIND if there is no qualifying event there may be no coverage. An example of a qualifying event could be if a pipe bursts and leaks through the ceiling and makes everything wet in your closet, and then mold grows a day later.
Loss of Use: As mentioned above this will provide coverage is there is a qualifying event that displaces you from your current home. It could provide temporary housing costs and other extra expenses.
Jewelry Limits: If you have any jewelry worth over $1,500 per piece make sure to look at the limits on jewelry
. Most of the time these are built in at the bottom of the policy and it shows the limit per piece and per incident. Jewelry is NOT considered in the total personal property amount and can be very limited.
Is “insert any situation here” Covered?
As an insurance agent we get asked this question A LOT. People tend to get mad at the answer.
“There might be coverage in that situation but there might not be.”
If you ask ANY insurance AGENT that question this should be their answer. The reason for that is because they are not a claims associate. Your AGENT is not the one who determines if there is coverage, that is the job of a claims adjuster/associate. If an AGENT tells you “Yes 100% that would be covered.” they are speaking out of their authority.
We can explain what each coverage SHOULD COVER but, each claim is different and is ALWAYS open to investigation by the insurance carrier.
The best way to make sure your claim is covered is to speak to your agent FIRST and let them do some research.
DO NOT CALL your insurance carrier first. THIS IS WHY you have an AGENT!!!!
In the end your AGENT is your advocate. When you buy a policy through a company you never even talk to you can likely be sure they don’t have your best interest in mind!