What does a Tenant Insurance Cover?
Tenant insurance is commonly referred to a renters insurance. It will provide you with coverage in case your personal property is either damaged, destroyed or stolen. It is also quite beneficial in providing you financial protection in the event that you unintentionally damage another person’s property or injure another party in your apartment or rented home. The exact question now becomes what does a tenant-insurance cover? Below is a detailed look into what it covers and why you need it.
Provides financial reimbursement
The key function of tenant insurance is to cover damaged or lost possessions. These possessions could be damaged or lost due to theft, fires or vandalism, and you will get full financial reimbursement. Your property is not always safe in a rented home or apartment, especially when you have a lot of neighbors. This is because it can be very difficult to identify who your neighbors are, and who are not.
There are also several factors beyond our control like fires. However unlikely such events happen, it is always beneficial to be prepared and ready. You need to have a contingency plan, and the best is getting a tenant-insurance cover.
In case any of the above scenarios occur, you need to be able to start afresh. The tenant insurance cover will provide you with financial reimbursement to compensate for your property loss or damage.
Covers your liability in case a visitor is injured on the premises
Accidents happen and they are never in our control. You can, however, cover yourself in the case of certain accidents. When living in a rented home, you are bound to receive visitors from time to time. The moment you welcome someone to your place of residence, you are making yourself liable for their well-being. You are therefore solely responsible should anything happen to them. How exactly do you cover yourself in the event of your visitor being involved in an accident?
The best option you have is ensuring you have a tenant-insurance cover. It will provide you with a liability cover and pay for any costs like medical bills and property damage.
Now, your landlord has an insurance cover, but it will not always protect you depending on where the accident takes place and the circumstances of the accident. Who is at fault is also a key aspect and may require you to take the full blame for the occurrence, you, therefore, need to be covered in such events. Yes, a number of times the landlord’s insurance might pay for the costs incurred during the injury. It is however not a guarantee and you need to be prepared.
Provide compensation in case of alternative living arrangements
Your rental home or apartment may become uninhabitable, and this can be caused by several factors including damage by fires or storms. You will, therefore, need to make alternative living arrangements and can be so short notice and you may be low in cash at the moment.
Your tenant’s insurance cover will provide compensation for the living arrangements that you will make during this period.
How exactly does a tenant insurance work?
It is important you understand precisely how you get compensated. It depends on the following two very critical issues:
- Type of coverage you have
- Type of loss you incur
When you take the tenant insurance cover you could either go for the replacement cost coverage or the precise cash value coverage. You will, therefore, receive different amounts of compensation depending on which coverage you decided to go for. I would, however, recommend that you always go for the replacement cost coverage to ensure you always get enough to purchase the lost property at its current value.
Other items like collectibles and jewelry may require you to purchase additional insurance coverage. This is because a tenant insurance cover may not be able to cover it fully. You will incur an extra expense, known as a deductible and is considered out of pocket.
Is the tenant insurance necessary?
It is not a requirement by law to have a tenant’s insurance cover. Some landlords may, however, require you to have it in the lease agreement. This is because they want to protect both you and them from any unforeseen occurrences. When both you and your landlord have a home insurance cover, then no matter what happens in the rental home or apartment then you will get compensation.
You also need to protect your valuables and property. Yes, there are so many ways to do this, but the best is by getting a tenants insurance cover. With it you can rest assured your property is well covered and you will be compensated in case of anything.
Let’s look at an example that is most likely to happen. What if your neighbor starts an apartment fire because they left their cooking unattended for a few moments? This fire may damage your entire unit and property. Without a tenants insurance cover, you are most likely not going to get any form of compensation. If you and your neighbor both have the tenant’s insurance cover, then the cost of repairs could easily be compensated. If either of you also experienced any property damage, then you could be compensated too.
It is therefore clear how a tenant insurance cover comes in handy and may really help you escape a tight fix. It may not be a requirement by law, but I highly recommend you to get one today.