When people sign a lease to rent a property of mine, I always remind them to get renter's insurance. I explain that my insurance policy covers the building itself, the applicances and liability issues that may arise. However, my policy does not cover their belongings in the event of fire, theft, and natural disasters.
Renters insurance typically covers your belongings in the event of:
fire or lightning strikes or smoke
wind or hail storms
explosion
theft
vandalism or theft
damage from vehicles or aircraft
riot or terrorism
falling objects
faulty plumbing, air conditioners, heating
These items may vary depending on what part of the country you are in.
Floods are usually not covered in a renters policy. This requires a separate flood policy. Also, in hurricane regions you may need an additional rider to cover wind damage.
Many tenants that move into a property tell me that they don't have enough things to lose should something happen. Well, not so fast, if you have a fire and you lost everything, how would you manage without insurance to help you cover the cost of buying everything from the start? So many people think that it will never happen to them. Well, unfortunately it does and it's too late then.
A renters policy with contents coverage and liability can cost anywhere from $180 a year to $250. Now that's cheap to replace everything that you have, should you have a catastrophe.
So before you say "no" to that renter's policy, talk to someone that has suffered a loss, and see what their feelings are on the subject. It's $20 a month for the peace of mind it can bring. I know two different families that lost everything they owned in two different fires, (they were not both my tenants) and neither had any insurance. They both have insurance now and always will.
NOTE: In checking on policies, be sure to talk to your insurance agent and find out whether they are quoting the policy with actual cash value or replacement coverage on your items. Actual cash value allows you the amount the item was worth on the day of the loss. The items value has been depreciated over time.
Replacement coverage pays what it costs to replace the item today. Find out which is best for you.
On every lease my tenants sign there are three different places in which I remind them to get renters insurance, and it is explained in detail. They are required to sign off in all 3 places.
This article is authored by
Sandy Shores REALTOR®, Melbourne/Palm Bay FL Real Estate
Brevard County Real Estate & Investing
I also buy, sell, rent, own and manage Investment Property.
that for you
Great advice....and it's really very cheap
In my lease, I REQUIRE they have renters insurance. They must produce proof before they can pick up keys on move-in day. I explain that in addition to covering their personal belongings, it puts a roof over their head if a disaster takes the roof off the house. If we get a hurricane through here, I will have enough to take care of with the owner's insurance rebuilding the house - I don't want a call from you expecting a new roof over your head - that's not my owner's responsibility, that's why you have renter's insurance.
We highly recommend it, but we don't require it for tenants. It's too easy for them to cancel it later to be worth my trouble to require it.
We do, however, tell them the true story about the tenant whose house here in town BLEW UP, literally, a year or so ago. Thankfully, she was not home at the time. She did NOT have renter's insurance, and she lost everything- clothes, personal papers, pictures, TOOTHBRUSH. I mean, everything. Our community gathered round and helped her out with clothes, donations, gift cards, and we found her a new home quickly, but she will tell you to get the insurance.
Hi Sandy, In my most younger days, I never thought about renters insurance- most young people probably don't. You have written a very good post, so that young renters can realize it will cost them a lot to replace those things that they don't think are worth anything! Great post Sandy!
Sandy, Few of my renters understand that renter's insurance is essential. Some tell me that living without renters insurance is a chance they're willing to take. Then comes disaster, I now have them sign a waiver that I explained the importance!
Just a thought,
Paul
Karen, Renters insurance is cheap for the headaches and heartaches it can save you later.
Drick, We are hearing of many landlords that are requring their tenants to get insurance. It is for their own protection.
Prest Realty, We have heard and seen similar instances here. The tenant goes out and gets the insurance as a condition of the move in and then cancels it after they're in. It's a shame, because things do happen, and then it's too late.
Hey girlfriend, I suppose when I was younger it wasn't something that I paid much attention to either. But it can come back and bite you in the behind.
Paul, I know, I've seen it happen, with renters that lost everything they owned in 2 house fires. Then it's too late.
Sandy,
Insurance should give renters piece of mind... It is an additional cost but how much would it cost to lose some or all of your stuff?
Ann
Hi Ann, It is additional piece of mind. It costs plenty to lose everything. You and I both know that. It can be absolutely heartbreaking to see someone lose everything they own.
Sandy,
This is one of those just in case items I do not live without....
Ann
Uhg! You would have to put a picture of Katrina hitting the coast. But your point is well taken.
Hi Ann, I agree, it is something that renters shouldn't live without.
Hi John, Oh, boy, I bet this brings back bad memories for you, doesn't it? A day you'll never forget...more than a day, I suppose. Sorry! How have you been?