Should I Purchase Rental Insurance? Tenant Rights

What is rental insurance?

Suppose your building burns down, or a flood, tornado, or other disaster destroys all your belongings. Many people assume that “the landlord’s insurance” will pay you for your loss. Not necessarily. The landlord’s insurance policy covers (1) his losses (i.e., the value of the building), and (2) his liability to others. But he is liable to others (such as you) if the loss was caused by his negligence. So if a fire was caused by faulty wiring or flammable materials that the landlord was responsible for maintaining, then he might be liable for your loss and his insurance company is responsible for paying you. If they won’t, then your lawyer may file suit against them to get what is coming to you.

If, however, the fire or other disaster was not caused by the landlord’s negligence, then the loss is yours to bear alone. This is why tenants need rental insurance. Rental insurance is an insurance policy the tenant takes out with an insurance company that specializes in this type of insurance. Premiums are usually pretty low, and you will be reimbursed for a loss from many different causes (including theft). If you have property that cost you a lot of money (computers, expensive stereo equipment, television sets, skis, etc.), it might be worth your while to get rental insurance. Also, the policy will protect you against lawsuits by guests of yours who might be injured on the property and sue you.

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