Renter’s insurance policies are valuable tools for both tenants and landlords. Today, we’ve asked Tom Hotaling to join us for a discussion on tenant insurance. Tom is an insurance agent with an office in a complex that MHN Properties manages. He’s extremely knowledgeable and helpful, and we appreciate his willingness to help us better understand renter’s insurance
What Does a Renter’s Insurance Policy Cover?
There are two components to a renter’s policy. It covers a tenant’s personal property if there is a fire, a theft, or some other loss. It also provides third party liability coverage in case there’s a slip and fall or an accident and someone decides to sue. Tenants need protection in those situations. The cost depends on the type of coverage tenants want. It’s usually between $20 and $50 per month.
Renter’s Insurance and Loss of Use
Recently, Texas went through Hurricane Harvey, and many tenants found themselves paying rent for a home they couldn’t occupy. Insurance plays a large helping factor because renter’s policies have loss of use coverage. So, if a tenant’s residence is uninhabitable, the policy will pay for the tenant to stay in a hotel or another home until the property is rebuilt.
We have tenants in that situation now. A property had a slab leak and the home became a construction zone. The tenants had to move out, and their insurance is paying for them to live elsewhere while the house is under undergoing repairs.
Pay Attention to Contents Coverage
When tenants are talking to their insurance agent, they should ask about contents coverage. Personal belongings should have a replacement policy that covers the full value of an item. For example, if a chair is lost in a fire that was originally purchased for $500 in a store, but you can get the same chair for $100 at a garage sale, tenants want to make sure they still get the $500 replacement value.
Finally, both landlords and tenants need to be aware of what most policies won’t cover, including aggressive dog breeds, above-ground pools, and trampolines. These are the top three liability claims, and dog bites are especially problematic. If the insurance company discovers one of these things at a property, they can cancel insurance or refuse to renew the policy.
Tenants should provide a copy of their renter’s insurance policy to their landlord or property manager.
If you have any questions about renter’s insurance, please contact Tom Hotaling at (210) 348-8500 or tomhotaling.com.
If you have any questions about a renter’s obligations under the lease, please contact us at MHN Properties, and we’d be happy to tell you more.