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What to Expect from a Renter’s Insurance Policy

Model Home with a Speech Bubble that Reads InsuranceAs a renter, buying a renter’s insurance policy is one of the best ways to protect yourself, your visitors, and your personal belongings. In fact, most Cabot property managers require their tenants to get renter’s insurance before their scheduled move-in day. If you are not familiar with renter’s insurance, you might not know what to expect. For example, what exactly does renter’s insurance cover, how much would it cost, and what are the different options available? In this article, we will look into these topics and more.

What is Renter’s Insurance?

The quick definition of renter’s insurance is an insurance policy that covers personal liabilities, belongings, and sometimes living expenses in case of injury, damage, or loss. Do note that these are items not included in the property owner’s insurance policy. That insurance is for the rental house itself and does not include you or your personal property.

What Does Renter’s Insurance Cover?

Some common types of loss covered by a renter’s insurance policy include theft, fire, and damage or injury due to natural disasters. Depending on the type of policy you buy, yours may also cover things like vandalism, losses due to civil disturbances, and damage caused by malfunctioning systems in your rental homes, such as the plumbing, heating, or air conditioning, and so on. If the extent of the damage is bad enough, your policy could even pay for the cost of alternative housing, meals, and other living expenses while your rental home is being repaired.

An important feature of a renter’s insurance policy is its coverage of accidental injuries sustained by other people while they are visiting your rental home. For example, if your visitor injured themselves or experienced damage to their personal property while they were at your rental home, renter’s insurance will cover you in case of a civil or personal injury lawsuit. In some cases, your insurance may even cover the cost of the legal representation you’ll need to help you defend yourself in court as well as any damages (up to your coverage limit) awarded to the other party.

What’s Required and How Much Does It Cost?

While it is not a requirement by law, a lot of landlords and property owners require proof of a renter’s insurance policy before leasing their home. However, even if you are not required to have one, you should still get a renter’s insurance policy. Policies don’t usually cost much but they offer extremely valuable protection.

Before you compare policies, make sure you know what the required liability limit is. Many landlords define the required liability limits in the lease and will require tenants to have specific endorsements like floods or earthquakes. These endorsements differ between locations and can be optional or required. As every situation and policy is different, you should be aware of what you need. The cost of your renter’s insurance policy and your monthly premiums will vary depending on the type of policy and coverage you choose. According to a recent analysis, the national average cost of renter’s insurance was $14 a month. But most renters pay a monthly premium of between $5 and $30. For the kind of protection and peace of mind you get from a renter’s insurance policy, that is a small price to pay.

Shop Your Options

Shop around for different options before settling on an insurance company for your renter’s policy. Big car insurance companies like State Farm, Allstate, or Progressive usually let you easily add on a renter’s insurance policy. But it is still good to get a few quotes, including from newer insurance platforms before you decide. This way, you know you have selected the most affordable coverage for you, your guests, and your belongings that offer the best protection you need.

If you are an owner looking for someone to take over the day-to-day tasks of your investment property, contact our team of Cabot property managers for more information. Don’t forget to ask about our FREE rental market analysis.

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