Home Insurance

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Are You Tenant? Here’s How Renters Insurance Can Protect Your Belongings

Not everybody owns the house they live in. Several people in our society stay in rented accommodations with their families, friends or strangers. A lot of people also move out of their own house and shift into rented accommodation to study or work in another city. Whether you live in your own house or rented accommodation, the contents of your house can be damaged if your house catches fire or a natural calamity strikes, apart from injuring you and your family members. To avoid suffering from any major financial losses and get your losses recovered, all tenants should get their home belongings covered under home insurance for tenants or renters insurance.

What is Renters Insurance?

A renters insurance is a type of home insurance policy that covers any loss or damages to the home contents of people living in rented accommodation. It is designed to protect the tenants from any sudden financial loss arising out of damages to their personal belongings due to unforeseen incidents such as fire, natural calamities, robbery, etc. It also covers any legal liabilities of the tenant in case a third party person or his domestic staff gets injured at his house.

In case your house becomes uninhabitable post an incident, your renters insurance policy will take care of any expenses incurred towards your temporary accommodation. Moreover, this insurance also provides coverage for any valuable possessions in case they get damaged, stolen or lost while travelling.

In short, a renters insurance policy is financial protection for a tenant as well as his personal belongings, such as clothes, furniture, valuables, home appliances, etc.

Who Can Buy a Renters Insurance?

Any person who lives in a rented house, apartment, villa, condo or any other living place can purchase renters insurance. The applicant must not be the owner of the house he is staying in and should be paying monthly rent to the owner of the house.

How is Renters Insurance Different from Homeowners Insurance?

There is a stark difference between renters insurance and homeowners insurance. As the name suggests, a homeowner insurance policy is designed for people who own the house they live in. On the other hand, a renters insurance policy is meant for people who live in someone else’s house as a tenant on payment of monthly rent.

Unlike homeowners insurance, a renters insurance policy does not cover any loss or damages to the structure of the building or house in which the tenant stays in. In case any damage is caused to the structure of the rented house, the repair work has to be carried out and paid for by the owner of the house or the landlord and is not a responsibility of the tenant.

Since the coverage available under a renters insurance policy is narrower than a homeowners insurance policy, it can be purchased at a lower insurance price than the insurance policy for homeowners.

What Does Renters Insurance Cover?

A renters insurance policy provides coverage against personal property damage, loss of use and personal liability. Take a look at these covers in detail below:

Personal Property Damage

Any loss or damages to the personal property of the tenant, such as furniture, clothes, jewellery, electronics, home appliances, valuables, etc., is covered under a renters insurance policy. As part of this policy, your insurance company will pay for the repair or replacement of your personal belongings that have been damaged, stolen, lost or destroyed due to:

  • Fire & smoke damage
  • Natural calamities, such as landslides, floods, earthquake, etc.
  • Impact damage
  • Manmade disasters, such as riots, strikes, etc.
  • Theft
  • Accidental damage
  • Aircraft damage
  • Vandalism
  • Leakage/ overflowing of water from pipes
  • Missile testing 

For example, if there is a robbery in your house and most of your belongings gets stolen, your renters insurance policy will cover the losses for you.

The renters insurance policy not only covers your personal belongings when it is within your home premises but also when it is outside the house. For instance, if the jewellery you are wearing gets stolen while you are attending a wedding, your renters insurance policy will pay for the loss.

Personal Legal Liability

A renters insurance policy covers any personal liability of the tenant in case a non-family member gets injured while at your apartment. For example, if a guest gets electrocuted because of a faulty wire and gets hospitalized, your home insurance company will pay for their medical expenses on your behalf. This policy also covers any legal expenses incurred in case a third party decides to press legal charges against you for causing damage to his property or injuring him at your house.

Renters insurance not only covers the liabilities of a tenant arising out of third party injuries but also his domestic employees. For instance, if your domestic help slips while cleaning the house and had to take medical aid, you will be legally liable to pay for his treatment expenses that can be reimbursed under your renters insurance policy.

Alternate Accommodation Expenses

In case your rented house had been recently damaged in a fire and is currently uninhabitable, you may be required to move to an alternate accommodation unless the house is repaired. In such a situation, you may have to stay in a hotel or homestay. The expenses incurred due to living in an alternate accommodation will be covered by your renters insurance policy. Also known as the loss of use cover, it covers additional living expenses incurred on the hotel bill, food bill as well as travelling in case you have to shift to a place further away from your office.

Your home insurance company will pay for your additional living expenses until you move back to your rented house after repairs.

Additional Coverage under Renters Insurance

Few home insurance companies may also provide coverage for the following under their renters insurance policy. Take a look:

  • Removal of Debris - Under this cover, your insurer will cover the expenses incurred on getting debris removed from your rented house after the occurrence of an incident or calamity.
  • Portable Equipment Cover - This policy may also cover any loss or damages to portable equipments, such as laptop, camera, etc. as a result of an unforeseen event.
  • Pedal Cycle - Some home insurers may also cover any loss or damages caused to the pedal cycle during unpredictable adversity.
  • Terrorism Cover - Under this cover, your personal belongings will be covered against any loss or damages resulting out of a terrorist attack.
  • Other People’s Property - This policy also covers any losses or expenses incurred due to the damages caused to the product that you had borrowed from someone’s else.
  • Food Spoilage - As part of this policy, your insurer will cover any spoilage of food due to sudden breakdown of your fridge.
  • Bank/ Credit Card Fraud - Under this cover, your insurance company will protect you against any forgery or loss of money caused by bank debit or credit card that was stolen from your rented house.

Some insurance companies may provide these additional coverage as an add-on cover on the payment of an additional premium amount only.

In a Nutshell

A renters insurance policy is the best way to protect your belongings if you live in a rented house as a tenant. The policy provides coverage against a wide range of perils and can help you avert the chances of a major financial loss in case an unforeseen event impacts your home. So get yourself a renters insurance policy today and live carefreely.

Written By: PolicyBazaar - Updated: 24 July 2020