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- Renters’ insurance has two components: civil liability and personal property coverage.
- Personal liability protects tenants if someone is injured on their property and sues for damages.
- A basic tenant policy has a liability limit of $ 100,000, but you can increase it or purchase an umbrella policy.
- See Insider’s Picks for the Best Renters Insurance Companies.
Tenant insurance protects you and your personal belongings. There are two main areas of coverage for a renters insurance policy: personal property coverage and liability coverage.
Personal property coverage is the most well-known feature of renters insurance. If your belongings are stolen or damaged, renters insurance will replace them. Personal liability insurance, on the other hand, protects tenants if someone is injured in their rental property, such as a slip and fall or a dog bite.
What is personal liability insurance?
If your dog bites a guest or someone is injured in your rental unit, liability insurance has you covered. Renters insurance also offers liability protection if someone sues you for damages.
There are limits to standard personal liability coverage depending on your policy and insurance company, typically $ 100,000. This is important if you are renting a home that has a pool or trampoline – you may need to increase your liability coverage.
Increase your liability coverage if you have a swimming pool or a pet
Having certain items, such as a swimming pool or trampoline, can increase your liability as a tenant if you rent a home with those items. This does not apply to tenants living in a complex with a community pool or playground.
According to the Insurance Information Institute, “A swimming pool is considered an ‘attractive nuisance’ and will increase your risk of liability.” The Institute recommends increasing your liability coverage to at least $ 300,000 to $ 500,000 if you have a swimming pool.
As with swimming pools, some tenant insurers see trampolines as an “attractive nuisance” and exclude them from policies. Other carriers have specific language for trampolines, requiring a net or them to be anchored to the ground depending on your condition, according to Steve Wilson, senior underwriting manager at Hippo Insurance.
In addition, exotic pets and certain breeds of dogs are excluded from certain tenant insurance policies. Some renter insurance companies will not offer coverage based on the size and breed of the dog, especially large dogs and breeds considered aggressive.
According to Wise Insurance Group, most insurers consider a pet to be exotic if:
- A permit is required to purchase the animal
- You must modify your house or yard to contain the animal
- The pet is a hybrid of a domesticated and non-domesticated animal (like the wolf and cat hybrids)
- The animal is found naturally in the wild
Animal liability coverage is not pet insurance. Pet insurance is a health plan for your pet. Pet Liability covers any damage or injury that your pet causes to someone. In addition, damage caused to you or your personal property by your pet will not be covered.
An umbrella policy is additional liability coverage that is available as an additional rider to your renters insurance. Umbrella coverage begins after you have exhausted your personal liability coverage limit.
Another option if you have a restricted dog breed and cannot get an umbrella policy to cover your pet is canine liability insurance. Dog liability insurance provides coverage if your dog bites or attacks someone. It’s a separate policy that’s useful if your renters insurance doesn’t offer coverage for your breed.
If you have an exotic animal, X-Insurance offers exotic animal liability insurance.
How much does tenant liability insurance cost?
The average cost of tenant insurance is around $ 15 per month, or $ 180 per year. Standard tenant liability coverage is $ 100,000.
A million dollar umbrella policy costs between $ 150 and $ 300 per year, according to the Insurance Information Institute. However, the Institute notes that most carriers require renters to have at least $ 300,000 in liability insurance before selling them an umbrella policy.