Renters Insurance/Tenant Insurance

Renters Insurance post

There are many individuals and businesses out there that own multiple dwellings and rent them out to tenants.  These individuals and businesses will want to cover these dwellings under a dwelling/fire and/or a commercial policy if it fits.

This policy will cover the dwelling itself, any detached structures, personal property in the dwelling that is owned by the owner can have coverage added, loss of rents and landlord liability and medical payments to others coverage.  In the case of a wind storm, a hail storm, etc. the structure and personal property that is damaged would then be covered under such policy.

The agent will do a replacement cost of the dwelling and any detached structures to ensure that they are covering the dwelling at 80-100% of replacement cost value.  The replacement cost value is the cost it would be today to replace the dwelling with like materials and labor.  The agent and insured want to verify that these numbers are adequate, otherwise, in the case of a claim and the house is underinsured, there can be a coinsurance penalty.

When looking at the other side of things and who is actually occupying the dwelling(s), the tenant should have a renter’s policy in place.  This renter’s policy will cover the personal property of the renter, additional living expense and loss of rents coverage, personal liability and medical payments.

It should be both the owner’s duty and the renter’s duty to make certain that they both have the correct coverages in place.  Also, the owner should confirm that the rental contract requires that the tenant must carry renter’s insurance in the case of a claim so if there is a claim, a fire for instance, and the tenant is found liable for the fire, the renter’s policy would come into place for coverage.  The owner does not want to have the misfortune of having a claim by the tenant who has no coverage and who does damage to their dwelling.

In short, if you are a landlord, make sure that you and your tenants have the necessary insurance coverage in place and that you ask for renewal policies each year to have on file.

By: Nick Hage, Citizens Agency Manager/Insurance Agent

Investment and Insurance products:

  • Are Not Insured by the FDIC or any other federal government agency
  • Are Not deposits of or guaranteed by a Bank or any Bank Affiliate
  • May lose value
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