Renters and Landlord Insurance: What’s the Difference?
If you’re moving into your first apartment or have recently purchased property you intend to rent out, there are differences in insurance coverage between those two situations that you need to be aware of. If there is ever an incident which results in a claim, you’ll want to know whose insurance policy is going to kick in… the tenant’s or the landlord’s.
What is renter’s insurance?
Renters insurance, commonly referred to as tenant insurance, is for people renting an apartment or house, and is often a requirement as part of the lease agreement. It protects the things the landlord’s insurance policy doesn’t, including coverage for a tenant’s personal property in the apartment as well as liability coverage, should an incident happen in the apartment unit.
Some people argue tenant insurance isn’t necessary, but have you ever thought about how much money it would cost you to replace all your clothes, furniture and technology like televisions, tablets and smart phones? It doesn’t take long for the total to climb into the tens of thousands of dollars.
What is landlord insurance?
If you rent out a room in your house; rent apartments in a triplex or lease commercial space to businesses, you’re a landlord and should have landlord insurance. Landlord insurance provides financial protection against damages to your property by a tenant (exclusions apply), as well as liability coverage should an incident occur (like a trip, slip or fall) on the grounds of your property.
Optional coverages – detached structures (not always included in main building coverage) must be listed separately. Belongings have to be listed – not automatic coverage.
Tenant insurance vs landlord insurance
Every policy is different, so make sure to talk to one of DPM Insurance Group’s experienced brokers or CSRs to ensure you understand exactly what is covered under your policy. Below is a list of what is typically covered under renters and landlord insurance.
What does tenant insurance cover?
- Liability Insurance – in case you are sued for accidental damage or injury within your apartment or house.
- Contents coverage – including clothing and furniture.
- Additional living expenses protection – this coverage reimburses you for a hotel stay if your apartment is inaccessible due to a covered incident.
- You can request additional coverage, such as coverage for jewelry and fine art, sewer backup, flood protection (if available), and overland water coverage (if available).
What does landlord insurance cover?
- Physical damage to the building brought on by fires, weather conditions (wind, hail, lightning), and other perils. This includes any attached or detached structures, such as garages, parking spaces, fences, and gates.
- Physical damage to belongings owned by the landlord that are used for property maintenance, such as gardening tools, equipment, snow blowers, lawnmowers etc.
- Personal liability against lawsuits resulting from property maintenance negligence that causes injury to a tenant or visitor.
- Optional coverage is also available for vandalism, theft, renovation, and items that are under construction.
Who’s at fault? Example scenarios
To further illustrate the difference between these two types of insurance, consider these examples to determine whose policy will step in to cover the claim for each.
A fire starts in an apartment and causes damage to an adjacent apartment and their belongings.
The landlord’s policy will cover the loss to the building and the repair costs. The tenant policy will cover the loss or damage to the tenant’s belongings (minus the deductible), as well as cover expenses for temporary living quarters, clothing and emergency supplies.
Someone trips and falls in a renters’ apartment and is injured.
The renter’s liability coverage would come into effect. If someone is injured in a stairwell or on the grounds of the property due to negligent maintenance, a claim could be made against the landlord’s liability policy as well.
An apartment is broken into and the stereo, television, and some jewelry are stolen.
Since these items belong to the renter, the tenant insurance policy would cover this claim. Keep in mind that if you want items such as an expensive piece of jewelry or collectibles insured for a specific value, you this must be listed on your policy. Ask your broker for more details on finding coverage for your special items.
Renters and Landlord Insurance FAQs
Are damages to my personal property covered by tenant insurance after a catastrophic event?
Yes, tenant insurance covers your personal belongings in the event of a covered natural disaster. The landlord’s insurance coverage will handle damage to the home or apartment building.
Why is landlord insurance more expensive than homeowners’ insurance?
Landlord insurance costs can be significantly more than homeowners’ insurance policy because landlords are assuming risks for multiple unknown people. Insurance companies often see lower average claim amounts and fewer claims for an owner-occupied home when compared to tenant occupied rental properties.
What factors influence the cost of renters’ insurance?
The exact cost of tenant insurance varies, based on different factors, including:
- The value of your personal belongings
- Your address
- The amount of liability coverage you purchase
- Your claims history
Contact an experienced broker at DPM Insurance Group
Whether you’re a tenant or you’re a landlord, DPM Insurance Group’s insurance experts can advise you about coverage that’s best for your needs. Talk to one of our CSRs or brokers today. Click here for the contact information to all of our six offices in Windsor-Essex and Chatham-Kent to find the one closest to you: https://dpmins.com/locations/