What is tenant insurance? | The bank rate

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What is tenant insurance and why should I consider it?

Renters’ insurance, also known as the HO-4 policy, is a type of home insurance policy designed to cover your belongings, liability exposure, and additional living expenses if you are renting out your house or apartment. . You may be able to add optional covers as needed to customize your policy to your needs.

In 2018, the most recent year for which data is available, an insurance policy for renters cost on average just $ 179 per year, according to the Insurance Information Institute (Triple-I). Renters insurance is not required by your state, but your landlord may require that you have a policy. Even if renters insurance is not a requirement for you, you may find that a policy can be beneficial. Renters insurance coverage can protect you from financial stress or devastation in the event of a covered loss.

What does tenant insurance cover?

Renters’ insurance can cover many situations, depending on the endorsements you add to your policy. However, the main guarantees of a tenant insurance policy are:

  • Personal Property Coverage: This coverage is designed to pay for your damaged or destroyed property after a covered loss. Personal property covered generally includes your furniture, clothing, household items and certain electronics.
  • Liability coverage: Your liability insurance may cover medical bills and legal fees if you are found to be responsible for injury or damage to someone’s property.
  • Additional living expenses: If you can’t live in your home or rented apartment after a disaster, this coverage could help pay for hotel costs and other expenses, like laundry services or pet boarding. Living expenses cover only covers the necessities. You should ask your insurance agent to see what exactly is covered when you purchase your policy.

You may also have the option of adding additional coverages, such as identity theft coverage, pet liability coverage, and scheduled personal property coverage to your policy. If you’re not sure what covers to consider, talking to a licensed agent might help.

Most tenant policies also exclude damage to your belongings caused by earthquakes and floods. While earthquake coverage can often be purchased as an endorsement, you may need to purchase a separate policy if you live in a high-risk area. Flood insurance is most often offered as a separate policy, although a few companies offer endorsements or include it as a coverage option.

How much does tenant insurance cost?

Renters insurance costs on average about $ 179 per year, per Triple-I. However, the cost of your tenant insurance policy will vary depending on several factors, including the amount of personal property coverage you purchase, the level of liability coverage you choose, the additional coverages you choose and the amount of coverage you choose. history of your complaints.

Which states offer tenant insurance?

Renters insurance is available in all 50 states and Washington, DC However, states with high tenant density, such as California, New York, and New Jersey, may have more active tenant insurance markets with more businesses and endorsements to choose from.

Renters insurance is not just for those who rent apartments. Renters of condos and houses also have the option of purchasing tenant insurance. In warmer states like Florida and Georgia, homeowners can choose to rent out their homes for part of the year if they live elsewhere. Tenants who occupy these homes can also purchase tenant insurance policies to cover their property and civil liability.

Which companies offer tenant insurance?

There are many renters insurance companies out there, but your options will depend on the state you live in. Not all companies are available nationwide, and not all companies offer renters insurance in every state they operate. If you are looking for the best insurance company for renters, you may want to get quotes from these providers:

  • Geico: Renters who want to manage their policies digitally can consider Geico. The company has one of the top rated apps in the industry.
  • Progressive: If you are looking for a highly customizable font, Progressive might be a good choice. The company offers a long list of optional coverages, including water and personal injury protection.
  • State Farm: Renters looking for an in-person agency experience may want to get a quote from State Farm. The company has more than 19,000 branches across the country.

How to save on tenant insurance?

Although tenant insurance is generally much cheaper than home or condo insurance, there are still ways to lower your premium.

  • Group your fonts: If you also have an auto insurance policy, consider bundling your renters insurance with the same insurer – you might get a discount on both policies.
  • Install protective devices: If you have smoke detectors, a carbon monoxide detector, or a home invasion alert system, you could save money on your policy.
  • Consider how you pay: If you can pay your annual premium in full, you could save money. If you need to pay in installments, many companies offer discounts if you sign up for automatic withdrawal.
  • Increase your deductible: Your deductible is the amount you will pay out of pocket if you file a claim. As a general rule, the higher your deductible, the lower your premium. Just make sure you pick a level that you can afford to pay if you file a claim.

Every insurance company is different, so discussing your policy with an authorized agent may help you find other ways to save.

Frequently Asked Questions

Do I Really Need a Tenant Insurance Policy?

Everyone’s situation is different and purchasing any type of insurance policy is a highly individualized decision. Renters insurance is not required by law in any state, but a landlord has the right to require tenants to purchase a policy. However, even if you don’t have to purchase coverage, renters insurance generally offers good coverage for a relatively low cost. If your budget is particularly tight, you may be able to take advantage of discounts to reduce the cost of a tenant insurance policy while still benefiting from attractive coverages.

How to take out tenant insurance?

The first step in purchasing a tenant insurance policy is to obtain quotes from several insurance companies. You can usually do this online or over the phone, or you can visit a local agency. You will need to provide your name, address and date of birth, and you can discuss your coverage needs with a representative. This information will help you determine the options and coverage levels that are right for you. Once you have chosen a rental quote to purchase, a representative will discuss the next steps. You may need to sign an application, and you may need to make a payment of at least a month.

How to choose a tenant insurance company?

Because there are several insurers that offer tenants in the market, you may not be sure where to start your search. Determining what type of coverage you need and what features you want (like a digital app, 24/7 customer support, or live agent) can help you find carriers that match your needs. You can then request quotes from multiple companies to compare prices, coverage, discounts, and features.

What type of insurance do I need if I own a rental property?

If you are renting a property, you may want to consider a landlord housing policy. This type of policy covers the structure of the house, isolated structures, and any personal property you provide for the house (such as furniture). However, your tenants should consider purchasing a tenant insurance policy, as a landlord housing policy does not cover renters’ belongings.

If you are operating a short-term vacation rental, you may want to speak to your insurance agent to make sure you have adequate insurance coverage. Your short-term vacation rental tenants likely won’t need a tenant insurance policy. If they already have a home, condo, or tenant insurance policy, their personal property coverage should shift to a short-term rental, just as it would to a hotel room.

Does a tenant insurance policy cover my pets?

It depends on the situation. Your pets are generally not considered personal property, so damage or injury to your pets is usually not covered by a renters insurance policy. For this you need pet insurance. However, your liability insurance may cover damage or injury that your pets cause to others. However, certain breeds of dog and exotic animals are often excluded, and any animal that you do not disclose to your insurance company could also be excluded from coverage. Talking about your pet with your insurance company is often the best way to confirm your carrier’s directions.

Is tenant insurance common?

Yes, tenant insurance is a standard policy. There are approximately 109 million renters in the United States, and most financial experts agree that tenant insurance is a prudent purchase. Due to the prevalence of renters in the country, many different insurance companies offer tenant insurance.


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