Should You Carry Tenant Insurance?

If you rent an apartment or house, you may think your belongings are protected by your landlord’s homeowner’s insurance. In most cases, that’s a faulty assumption that could cost you big money if any of your belongings are damaged or lost due to an event you thought was covered by insurance. Tenant insurance is relatively inexpensive, and could make the difference in being able to replace your vital tools, clothing and furniture.

Your landlord’s homeowner insurance is meant to protect him from financial damage arising from home damage. In most cases, it will not cover financial or material loss to a tenant’s belongings. If a tree branch crashes through your living room window and allows rain to ruin your sofa, for example, your landlord’s policy will pay for repairs to the window. In most cases, however, it will not cover the cost of replacing your sofa. You’re on your own for that unless you carry your own insurance.

Insurance designed for renters or tenants typically covers damage to your belongings from any covered event, insurance lingo for things that might happen to your stuff. Depending on your policy, it may also cover a number of other things that you’ve never even considered.

Protection From Theft

Your landlord’s policy probably won’t cover your losses if someone breaks into your house and steals your television, but your tenant policy probably will. As long as you’ve done your part to secure your property like locking your door, for example, most tenant policies cover losses from burglary or theft.

Fire Damages

In addition to replacing belongings lost in a fire, a tenant policy generally will also cover the cost of cleaning your furnishings, clothing and other items that may have been damaged by smoke or water. Even if the fire wasn’t in your apartment and your belongings were untouched, it can cost hundreds of dollars just to have all of your clothing, curtains and furniture cleaned to remove the smell of smoke. Your landlord’s insurance will almost never cover that.

Damage Done By Your Pet

Many insurance policies for renters include an inexpensive rider to pay for any damage your pet does to the apartment, as long as you’ve made reasonable attempts to limit the damage.

Reimbursement for Losses After Electrical Outage

Residential insurance typically will reimburse a homeowner if an electrical outage results in a freezer full of spoiled meat, but that seldom extends to tenants who rent an apartment in a building. Rental insurance usually does include reimbursement for losses that result from an electrical outage, including spoiled food.

What It Doesn’t Cover

Do read your insurance policy carefully. Most set limits on the dollar amount they’ll pay out for a single item and for all items in a single claim. If the single-item limit is $500 and your new mountain bike cost you $750, your reimbursement will be limited to $500. In some cases, policies may specify that they don’t cover computer and electrical equipment, expensive jewelry, workshop equipment or other specialty items. They may also exempt coverage for expensive hobby items, such as your tropical fish or a coin or stamp collection. Talk to your insurance agent about special riders to cover anything that exceeds the single-item limit on your policy.

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