Normally I wouldn’t cover topics on rentals. However many of today’s potential buyers are renting and many do not have adequate insurance coverage. Tellus does a good job of explaining the ins and outs of rental insurance and were kind enough to allow me to reprint:
Every tenant should have renters insurance, also known as an HO-4 policy. It is not required by law, but a standard policy provides peace of mind. Let’s take a look at five reasons why you need renters insurance.
Some tenants believe their landlord’s insurance will cover their personal possessions. In fact, landlord insurance protects the landlord from financial losses through property and liability coverage. In order to protect your personal property, you need renters insurance. For travelers, renters insurance can be a lifesaver. Certain policies extend protection while you’re on vacation!
Renters insurance will reimburse you if a named peril—an unexpected and accidental event covered in the policy—causes any loss or damage to your property (including food). Check out this list of a few named perils covered by renters insurance:
The liability portion of a renters insurance policy will protect tenants against lawsuits for bodily injury or damage that happened on or off the property. For example, your guest can file a claim if they slipped and fell inside your home or if they were bitten by your pet. Your policy would pay for the medical bills or your legal expenses in the event the person sues.
Keep in mind that renters insurance will not cover a pet that is considered a “dangerous breed.” To be certain a policy covers pet-related injuries, ask an agent about their breed restrictions, such as Pit Bulls, Rottweilers, Chows, Presa Canarios, and Akitas.
If your home becomes uninhabitable as the result of a covered peril, some renter’s insurance policies will reimburse you for additional living expenses under a loss of use provision. Expenses include hotel bills, restaurant meals, and other costs incurred by your forced relocation.
Unless you live in Oklahoma, your landlord can require you to purchase renter’s insurance and make it a condition for lease renewal. Renters insurance provides another layer of protection for landlords by limiting their liability and making you, the tenant, responsible for your own losses.
Some states put a dollar limit on renter’s insurance policies; one bans it entirely. Here are some interesting facts:
Renters insurance is generally low-cost, but rates do vary based on location, coverage amount, and credit.
According to Insurance.com rate analysis, renters insurance costs $17 a month or $204 a year; it is the national average for a recommended coverage level of $40,000 for personal property, $100,000 of liability protection, and $1000 deductible.
Renters insurance covers a number of perils, but it excludes earthquakes and floods. You should purchase separate policies or purchase a rider, also known as an endorsement, to get coverage for these two types of disasters.
An insurance rider (endorsement) is an amendment or an addition to a basic insurance policy. Riders can be expensive in areas prone to a specific type of peril, like floods.
While you shop for renters insurance, speak with an agent or obtain a sample policy to understand what is covered. Sure, renters insurance is another expense; however, for a few dollars a month, it safeguards your financial future, your valuables, and it can make you a better-qualified tenant in a competitive rental market.
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