Why you need tenant’s insurance

Find out how being a renter could cost you big bucks without adequate protection. Here are a few reasons you need tenant's insurance.

Tenant insurance is an insurance policy that is very similar to homeowners' insurance. However, there is one big difference – a homeowner's insurance policy covers the house and its attachments (shed, garage etc.), while tenant insurance does not. However, if they cause harm to the space they are renting or to others living or visiting there, tenants are responsible for paying for the damage, be it for instance reconstruction or paying for medical bills of those injured in the space they are renting.

Here are three main reasons why every tenant should have this type of insurance:

1. Tenant insurance covers costs of damage to tenant's belongings.
2. It helps them cope with reimbursement of money spent on hotel accommodation during reconstruction of the property.
3. Liability coverage takes care of costs resulting from somebody suing the tenant.

Tenant insurance can secure you in two different areas – liability and contents. Liability coverage very much resembles that in a typical home owner’s insurance policy. It protects tenant if they are being sued for an injury taking place in the unit they are renting. Contents coverage, as previously written, takes care of costs of replacing or repairing insured items.

The cost of tenant insurance depends on variables like the location of the property, the manner in which it was constructed, and the type of insurance company the tenant chooses. Needles to say, the biggest factor in determining the premium is the value of the insured items. It is highly advised that every tenant opts for some kind of tenant insurance as it is a low price to pay compared to costs of replacing damaged goods or lost valuables. Tenant insurance should be a part of the monthly budget, just like accommodation and food.

Tenant insurance can be bought in the majority of insurance companies. Beware that this insurance sometimes excludes coverage of costs caused by, for instance, flooding. So make sure that if you are living near water, you buy suitable tenant insurance. If you are asking yourself how much coverage you actually need, the answer is to itemize your belongings room by room and figure out how much it would cost to have it all replaced. There is also a difference in protecting your property against every possible risk or securing them only against the most common risks like water damage, vandalism, lightning, and situations of the like. Also remember to update the list of your possessions once a year.

Lastly, many property management firms require their tenants to have a tenant’s insurance policy. So, regardless if your landlord requested for you to get one, or you are just taking the initiative, safeguarding what is of value to you is always a smart move.