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5 Reasons Why Renters Need a Home Insurance

A home policy is an insurance that covers the damage suffered by a home as a result of the risks contemplated in it. That is to say: the insurer with which it is contracted guarantees that it will pay for the repair of the damages (electrical, water, aesthetic, etc.) as long as it is thus reflected in the policy. Its coverage can be extended to the structure of the house and the fixed elements that are part of it and the content (the furniture and belongings that are in it).

According to an article released some time ago by an authority in the area, the Renters Insurance Scottsdale Az agency, since with a home insurance for renters the container and the contents can be equally protected, as with any other multi-risk home policy. The difference is rather that the risks are expanded to take into account the specific needs of someone who does not own the house and who signs a contract to live there.

For this reason, aspects such as legal defense are taken into account, offering advice and protection in case of breach of contract, for example, or civil liability as a tenant, which guarantees a sum to cover damages caused to third parties. Or even theft, in order to protect the tenant’s personal assets, which are outside the scope of the home insurance that the owner may have.

In no case is it mandatory for the tenant to have an insurance, although it is highly recommended. Especially if you have particularly valuable personal property (for example, computer equipment). A home insurance for renters provides extra peace of mind, knowing that you are protected in any situation.

Who should pay for home insurance in a home for rental?

To understand the benefits of renter’s home insurance, it is important to first understand your rights and obligations as a renter. Imagine that the refrigerator breaks down. Being part of the inventory, the owner is obliged to repair or replace it if necessary. But what happens if you are the one who spoils it because you have left the door open? In this case, the repair would be at your expense.

And if they break in to steal?  If the owner has home insurance contracted for the house, it may cover the damage caused by forcing the door, but in no case will they compensate you if, for example, your personal computer has been stolen. The owner’s home insurance—if he has it—does not protect non-inventory contents (i.e., your personal property).

There are other situations where renters home insurance could save you from serious trouble. But they are summed up in this idea: in the event of an accident, if the responsibility is yours, the owner’s home insurance will not respond and you will have to bear the costs of the damage caused, unless you have your own home insurance for renters to back you up.

On the other hand, even if some conditions have been agreed and signed in the rental contract, the owner could fail to comply with them. For example, refusing to return the deposit. A home insurance for renters will support you in these situations, both to recover this money and to know what legal steps to follow when claiming.

It is recommended that the owner have contracted home insurance that, at least, covers the continent of the property against possible situations that could seriously affect and damage the home (at least, against fire). Likewise, it is also advisable that both the owner and the tenant have civil liability insurance that protects them against possible damage that the home may cause to third parties, such as a flood.

What does it cover?

It must be taken into account that each company may or may not include certain coverage as standard or optional and also offer different types of rental insurance, depending on the level of protection.

In any case, there are a series of more or less common guarantees in most policies, which we will detail below, so that you know in which situations home insurance for renters can protect you.

– The most interesting coverage for you as a tenant is the one that protects the Content —that is, your personal assets— in case of theft, fire or other covered risks that may damage them. With this guarantee, the company not only covers the cost of replacing the goods, but also the material damage that the incident may have caused.

– Some companies extend the theft guarantee outside the home. For example, if you are mugged in the street and your jewelry or cash is stolen or if your credit cards are used fraudulently, the insurer offers you compensation for the amount stolen, up to the limit agreed in the particular conditions of the policy.

– The Civil Liability coverage   responds to situations in which you can cause damage to third parties (both you, as a landlord, and any person in your family who resides at home). The companies give you various options for amounts to receive, depending on what you agree on in the policy (normally, you can choose between insuring sums of $60,000, $150,000 or $300,000).

– With the Water Damage guarantee you will be protected against one of the most common incidents.

– In addition to water damage, electrical damage may be included. For example, if there is a power surge and an appliance breaks down.

– Assistance against possible breakdowns of the home. Some companies offer complete assistance coverage that extends the basic guarantees. In many cases, you have a helpline 24 hours a day.

– Legal defense, in case of having to process a claim.

– Recovery of deposits: if the landlord fails to comply with this part of the contract and refuses to return it to you when you decide to end the rental, despite the fact that you have followed the steps stipulated in the contract, the company supports you by processing the claim of the same.

– As an optional guarantee, some companies include among their rental insurance services -both for owners and tenants- computer advice.

– Hiring a broader policy -the equivalent of all-risk insurance- can also include more valuable assets, such as jewelry or money.

– Aesthetic repair of goods.

– Depending on the company, the list of guarantees may include services such as DIY repairs.

What coverage does it not include?

A Renters insurance does not contemplate, as a general rule, the defense in case of eviction or any type of compensation. In addition to these exclusions, you can find other limits when purchasing home insurance as a renter.

A renter’s insurance, normally, takes into account the content and not the container. In fact, its coverage is against fire, lightning or explosion, or malicious acts: it mentions the damage suffered by the content in these cases and not the continent; that is, the fixed elements that are part of the house. It is the owner of the house who must insure the continent.

Some companies have specific guarantees for renters that can be included in a policy. That doesn’t mean all coverages are available to everyone, homeowners or renters. Not having the same list of guarantees is another limitation that you may face.

In any case, accessing according to what benefits is something that can also happen to the owner. Not all companies include the same guarantees. Hence the importance of comparing. You can find an insurer that offers liability for the owner, his entire family, the tenant and even pets.

Details to be considered

– Once you decide to purchase home insurance for renters, you should carefully read the fine print of the policy. There are many aspects that you must take into account, because not all policies have the same guarantees or establish the same limits for them.

– The amount of compensation with which the company responds, in case of Civil Liability before third parties.

– The insurable amount, in the case of aesthetic repair of the goods.

– The maximum limit of insurable capital, in jewelry and money.

– The maximum limit to receive in case of water damage or electrical damage.

– In case of cash theft, what maximum amount of money will you recover, since the company only insures you up to the limit specified in the policy conditions.

– If there is a maximum capital designated for the free choice of lawyer, in case of needing legal defense or if, in any case, all the expenses for this case are covered.

– In the home repair guarantee, if there is a maximum limit of times that this service can be used.

– In case of uninhabitability of the house -due to an accident- you have to know if the company offers you any guarantee, such as hotel expenses if it were not possible to sleep in the house.

When can’t renter take out insurance?

There may be some situations where, as a renter, your insurance application is denied. As it happens when taking out car insurance, you need your documentation. If you do not have a contract, with a renter’s home insurance the same situation can occur, but they can also refuse to insure you for other reasons.

Let’s see with a concrete example what possible causes are established for the company to refuse to insure a tenant. In the conditions of some companies, we can read the following:

“The content of:

– Homes with a rental contract of less than one year.

– Homes for timeshare contracts.

– Tourist accommodation, hotels, rural tourism and the like.

– Shared or room rentals.

– Rentals without a written contract”.

What prevails is common sense. If the house is not legally regulated, the insurer does not respond. Nor if it is a house that is rented by rooms: the risk assumed by the insurer is higher when it is a house in which different people live from time to time, than if the insurer is a person who lives alone or as a couple and has a long-term contract.

Do you need permission (or something similar) from the owner?

The tenant is free to apply for home insurance, regardless of the owner. Each one insures his own. Duplicating coverages would not make sense. In any case, the civil liability that the landlord may have through his home policy does not cover that of the tenant. And it is also important to know that the container is the furniture of the house, not the personal things of its inhabitants.

The tenant protects himself and his belongings; his personal property. The landlord cannot force the tenant to pay or purchase home insurance. As a landlord, he has to assume civil responsibility for the damages caused by his home -when they cannot be directly attributed to acts of the tenant. In any case, having adequate home insurance would be advisable for both the owner and the tenant.

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