What is Tenant’s Insurance?
Simply put, tenant’s insurance (also known as renter’s insurance) is an insurance product aimed at people renting rather than owning their home, and it typically covers all of that person’s possessions within the home, as well as their liability for accidents or damage occurring at the property.
In many cases, tenant’s insurance is optional, but some landlords require their tenants to have their own insurance policy through a clause in lease agreements.
How Does Tenant’s Insurance Work?
Tenant’s insurance works much like any other insurance product; you pay monthly or annual premiums in exchange for financial coverage in the event of loss or damage to your possessions within the home, or in the event of damage occurring to the property for which you are responsible. It also covers you for liability claims, in case you accidentally cause damage to the building itself or other units within the property (for example, if you cause a flood or a fire). You do not have to own any part of the home in order to have tenant’s insurance, and the insurance is completely separate from your landlord’s home insurance policy.
Doesn’t My Landlord’s Insurance Cover Me?
It’s important to note the difference between your landlord’s insurance and yours. Your landlord should and probably does have home insurance for the property in which you live, and this covers the building’s structure, their liability, and so on. But it does not cover you, your possessions, or your liability. You will not be named on their policy at all.
The same is true if you have a roommate and they have their own tenant’s insurance. This is their policy, not yours, and it will not cover you or your stuff. This is often misunderstood, and nearly 30% of those without tenant’s insurance falsely believe they are already covered under someone else’s policy.
What’s Included in Tenant’s Insurance?
There are three main areas covered by tenant’s insurance: