Tenant insurance is not a legal necessity. It is not illegal to stay in a rented house without having one. However, it is the right of every property owner to demand their tenants to get tenant insurance while staying in their residential property.
They may have insured the building separately. Nevertheless, it would not extend its coverage to the contents of the rental units. Assume that a flood damages all your belongings. The residential property insurance will not be paying for the replacements.
Without tenant insurance, you will have to pay for them. Similarly, even if your property owner’s property has insurance and you happened to damage it, you have to bear the expenses since you do not have tenant insurance. It is vital that you have one even if your property owner does not make it a necessity.
Want to know why? Continue reading.
General Coverage Areas
The policies that your insurance has depends on where you have acquired it (banks or private insurance firms). Most insurance plans allow people to customize coverages. If you are lucky enough to find one, you can mix and match the protections based on your needs. In general, tenant insurance would cover all your personal belongings.
This includes furniture, clothing, and jewelry. It also covers the physical injuries if one were to happen inside the premises. If your home suffers damages due to natural disasters, you can claim the additional living expenses (ALE). This helps you pay for meals and a place to live at times like this.
Cost & Deductible
The premium you pay varies with the coverages that you have requested. The amount of money that you will be receiving for your damages is closely related to the amount you pay as a premium. Based on your coverage, this may change every year. You can access most basic coverages by just paying $25 per month.
This is no way close to the sum of money you would lose if your furniture and electronics are damaged which makes it a valuable investment. You should pay your deductible regularly in order for you to stay eligible to claim insurance. In general, the higher the deductible, the higher are your coverages.
Additional Living Expenses Coverage
The additional living expenses coverage is for the situations that ruin your entire living area making you temporarily move out and find a place to stay. These situations do not necessarily need to have their origins in your house. You could be a victim of the collateral damage of an event that did not initiate in your unit.
You would have to find a temporary resting place or rental homes in a situation like this. ALE would pay for this and for all the meals that you had in this interval. If you happened to choose a friend’s home or rental home that has a kitchen in it, you are unlucky. Because you are violating the criteria of ALE coverages.
Can Your Landlord Force You To Acquire Tenant Insurance?
There is no strict law that forces all tenants to acquire tenant insurance. The court also condemns house owners who force this insurance onto their tenants. However, certain property owners may have included it in their lease agreement.
If you have signed the lease and then do not respect it, the owner has all the right to file a complaint to move you out of the house. They can also terminate your tenancy and could evict you at any moment if you fail to renew your insurance. If I were you, I would read my lease agreement keenly next time I sign one.
It is always better to expect the worst and to stay prepared. It does not matter if you are a property owner or a tenant; tenant insurance is and will always be a safe bet that can only make things better. Nevertheless, can commercial property insurance protect you from theft? Read this article to find out: How Can A Commercial Property Insurance Protect You From Theft: A Complete Run-Through.
Acquiring insurance is just one part of the process. The rest lies in tracking it properly and renewing it in time. The coverage plans might vary from one year to the next so you might as well have an eye on them.
If you are someone who is managing many rental homes at once, you can automate the entire process with the help of insurance tracking software. Talk to our experts right away and Schedule A Free Demonstration.