July 31, 2009, Newsletter Issue #143: How Renter’s Insurance Is Different From Homeowner’s Insurance for Rentals

Tip of the Week

While there are many similarities between renter’s insurance and homeowner's insurance, there are a couple of significant differences when applied to rentals. If you’re going to rent a home, your cost will be lower than it would be with a homeowner’s policy. Here are the primary differences between the two.

Insurance for renters does NOT require any coverage for the home itself, or any other structures on the property (shed, garage, etc.). Since landlords -- not you -- own home rentals, you need not cover any structures (nor are you allowed to have coverage), including the house in which you live. Rental property insurance primarily provides coverage for Your personal property Liability protection. Your renter’s insurance coverage for liability typically pertains to accidents, injuries, or other potential losses that occur within your home. Similar to the protection for the house, outbuildings, and other exterior items, your landlord should have liability insurance coverage for mishaps that occur on the property. Since liability claims can involve both small and very large amounts of money, you should have sufficient liability protection for any rentals you occupy. Don’t forget that, even though you’re not typically required to cover the interior walls, ceilings, and floors of your rentals, the paintings, rugs (other than wall-to-wall carpeting), hanging lamps (if you’ve put them up), small appliances, electronics, clothing, and all other personal property should have renter’s insurance coverage. While it’s tempting to lower your premiums whenever possible, make sure you have a good idea what your personal property is worth and cover it adequately.

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