When you are a homeowner, you carry a mortgage and are required to insure your property. However, if you’re a renter, the choice of insurance is optional and if you face financial uncertainty, you may decide you don’t need renters insurance. One thing is for certain, renters insurance is a big deal and both NYC renters and NYC rental property owners need to be aware of this.
For NYC Renters – Why you Need Renters Insurance
When moving into a rental property, if you think your personal belongings are covered under your landlord’s insurance in the case of a fire, theft or flood, think again. Your landlord’s insurance generally only covers any damage to the building’s structure.
Typically, many renters don’t think their personal possessions are even worth enough to get coverage. You may be feeling the same way here. However, you might just be surprised just how much your accumulated items are really worth and what it would cost you to replace them.
It’s a good idea to walk through your your rental residence and take a complete inventory of your possessions in each room. Don’t just think your electronics or appliances are the only big-ticket items you need to concern yourself with. Items that can also add up include:
- Figurines and other collections
- and more
Did you know that the average renter who is living in a two-bedroom apartment typically has around $30,000 in personal belongings after being tallied up?
What Your Landlord’s Insurance Doesn’t Cover
Your landlord’s insurance usually protects them, not you. It covers them against building structural damage and in many cases, damage that you the renter cause. This is where their coverage stops, however.
It doesn’t cover your personal belongings or living expenses in the event of theft or some type of natural disaster. It also doesn’t cover you from being responsible for any damage caused by you inadvertently such as your dog biting a guest, a plumbing mishap or a kitchen fire.
If appliances like your refrigerator in your rented home are owned by the landlord, the $300 you spent in food to fill it up are not covered by your landlord if the fridge should break down and spoil it. This is your responsibility and is an example of something your renter’s insurance would cover.
What Renters Insurance Covers
Things renters insurance typically covers are your personal property, personal liability, loss of use and other’s medical expenses. Renters insurance will typically cover you in the event that your personal property is damaged, stolen, or destroyed. Some examples of personal belongings that would be covered include:
- Collectibles (with limits)
- Jewelry (with limits)
- Sports Equipment
Your personal belongs are generally covered for damage or loss caused by theft, smoke, fire, electrical surges, vandalism and more.
How Much Renters Insurance Should You Get?
This is something you should sit down with your insurance company and discuss. How much insurance you should get will depend on your specific circumstances, such as the value of all your belongings, if you have a roommate, or any additional coverage you may be considering.
For NYC Rental Property Owners – The Importance of Talking to your Tenants about Renter’s Insurance
As a NYC landlord, It’s important that you are upfront with your tenants from the very beginning in letting them know that their contents are their responsibility since your insurance doesn’t cover them. It’s a smart idea to encourage your tenants to purchase renters insurance so their contents are protected if stolen, destroyed, or damaged.
Disclose all Information to Your Renters and Insurance Company
Still, insurance can be full of disclaimers and intricacies, making it confusing. Therefore, you should talk with your insurance agent to ensure you are properly covered for your rental property. If you don’t tell your insurance company that you are renting out your home, your homeowner’s insurance may not cover you for that home. This is why it’s important that you disclose all information to your insurer.
Not just this, but, there are other concerns when renting out property. For instance, you may be wondering if you’re liable if a tenant of yours (or their guest) becomes injured. In most cases, it’s your tenant that is liable, not you. It’s definitely something you’ll want to make them aware of.
This can be a gray area, however. You may be wondering if the front sidewalk is slippery because the tenant failed to shovel the snow or throw salt on the ice and the mailman slips and gets injured if this is yours or your tenant’s responsibility. This is what you should discuss with your insurer before you rent out your property and let your tenant know if indeed they are liable for mishaps and accidents like this.
Whether you’re a renter without insurance or the rental property owner, renters insurance is definitely something you’ll want to discuss with each other as well as the insurance company. It’s fairly affordable and can typically be added to car insurance as a rider or purchased separately.