When buying a home, it is typical that the lender requires the buyer to have home insurance – to protect their funds in case of an unfortunate event leading to damage or destruction of the home. However, when this home is deemed a rental property there is a common misconception that home insurance is enough. In fact, a high percentage of renters skip getting insurance all together! Here are some key points why Tenant Insurance is so valuable, to both the Tenant and the Home Owner:
- To Protect the Tenant’s Possessions in Case of Accident (eg. Flood or Fire)
The home insurance policy held by the home owner typically only covers the property and building structure, in case of damage or destruction. Therefore, if there was a fire the tenant would have no coverage for his/her possessions if they do not hold tenant insurance. Content replacement cost is widely underestimated. Even if an individual has minimal possessions, the cost to replace everything kept in their home, from spices in the kitchen cupboard to clothing, to basic hygiene supplies adds up extremely quickly. Add in furniture, electronics and jewelry and this would accumulate to be a large loss for someone without insurance. In comparison to the cost of tenant insurance, it seems quite simple that it is not worth not having an insurance plan in place to cover a potential disaster.
- To Protect the Tenant’s Possessions in Case of Theft
Unfortunately theft and burglaries do happen. When a home owner experiences a home burglary, their stolen possessions are typically covered by their home insurance policy. If you are a renter and someone breaks into your home, the insurance policy held by the home owner will not cover your stolen possessions. These possessions would only be covered if you held a tenant insurance policy that included this. In addition, this coverage could also protect the tenant’s belongings while they are away from home, for example in their vehicle or while travelling. When looking for a tenant insurance policy ensure you explore which cases of theft would be covered.
- Liability Coverage
Tenant’s insurance provides coverage in case of an incident of unintentional bodily injury to others. This could include a situation in which a guest was injured during a visit to the home, such as a fall on a slippery step or even in the instance that a family pet (dog) was to bite. If such a situation was serious, the tenant could be responsible for costs including the cost of medical expenses and loss of wages due to injury. Most individuals do not have the financial means to compensate others that are injured, or the cost of defending a lawsuit without this liability coverage.
- Accidental Damage to Property not Owned by You
In addition, accidents happen and have the potential to be very costly. If a tenant causes damage to the property of the landlord, whether it is as small as breaking a window or as large as an unattended candle causing a fire throughout an entire apartment building, the tenant is responsible to repair these damages. From a hundred dollar repair to millions of dollars in repairs, holding tenant insurance can cover unintentional damages.
- Living Expenses during Repairs
If a home did incur such damages that it needed extensive repairs and was not fit to live in, the living expenses of the tenant while these repairs were being made would only be covered if the tenant had his/her own insurance policy. Could you imagine having to leave your home for a few weeks or a few months as it goes through repairs resulting from a flood or fire? Just a few weeks, let alone a few months would be extremely pricey to find immediate short term accommodation. A typical person would not be able to afford such expenses. A tenant insurance policy could provide the safety net of covering such expenses in this emergency situation.
Another great benefit of tenant insurance is how affordable it is. Rates of course will depend on the coverage chosen within each individual policy, but regardless the low cost of these policies in comparison to the financial hardship that could arise from not having a policy in place is peanuts.
- Happy Tenant = Happy Landlord
In all cases of unfortunate events in which tenant’s have their own insurance policies, you can see it can provide a lot of resources and comfort in these situations. Without holding an appropriate policy, chances are the tenant will incur a lot of undue hardship and financial strain. Therefore, tenant insurance can provide security, peace and comfort to the tenant. The landlord depends on the financial commitment and responsibility of the tenant. Therefore, as described above there are many benefits of having tenant insurance both for the tenant and the landlord. At the least, landlords should be encouraging all their tenants to acquire this type of insurance, to ensure security for all. A Happy Tenant = a Happy Landlord.
Don’t forget to contact Maxxam Insurance for all your Tenant Insurance needs!