In today's market, there are occasional additional costs associated with renting an apartment. Once an option for individuals, renters insurance is more commonly becoming a must-have for landlords to consider renting applicants.
Who does this affect?
This living expense is becoming a catch for some apartment owners and managers to use when evaluating a potential renter. To take the financial burden off themselves, some landlords are now requiring that leasees acquire renters insurance. The change applies to new tenants, as well as existing renters whose leases are up for renewal. This will be quite a difference for many. A study conducted by the Independent Insurance Agents & Brokers of America found that about two-thirds of nearly 81 million renters don't have insurance.
This push for individual insurance is a response to increasing costs for landlords to insure their apartments, which have a higher chances of assaults, falls and fires than other commercial properties. By telling renters they need insurance, property owners and managers can relieve themselves of some responsibility.
What is the difference between liability and contents insurance?
The two main forms of renters insurance, liability and contents, are usually packaged and purchased together. Contents insurance protects a renter's personal property and belongings, including expensive items like electronics, furniture, clothing and jewelry. Liability insurance covers injuries a tenant may have sustained in their rented space from slips and falls. It also shields renters from a suit from a landlord for damages caused by negligence.
According to the IIABA, the average cost of renters insurance is $12 a month, which totals $144 a year for about $30,000 worth of coverage. Up to two roommates can usually be covered under one policy and certain discounts may be available if the renters have risk reduction measures in place, like safes, security systems or smoke alarms.
Who should decide?
Although some groups of tenants are not opposed to the idea of it, the thought of requiring renters insurance rubs them the wrong way. They believe the choice should be up to the renters since it forces them to pay for an extra expense. The San Francisco Tenants Union, according to the Wall Street Journal believes this requirement of renters insurance is a way for property owners and managers to minimize their own costs and put it on the tenant.
At the end of the day, renters insurance is a contractual issue between renters and their landlords. As a tenant, make sure to read over the lease you're signing to make sure you know the requirements of your apartment.
CoverHound provides renters insurance from its easy-to-use website.