Why Renters Insurance Is Important When It Comes To Leaks
Even though it is the responsibility of a property owner to maintain a rental unit, tenants should strongly consider purchasing a renters insurance policy. They might find themselves filing a number of different claims if a leak occurs.
Leaks that damage personal property
Most people know that renters insurance covers personal property in the event something damages it for which a renters is not at fault, such as a leak. It’s coverage that is simple but could a tenant a lot of money if they otherwise would have to replace personal belongings out of pocket.
Remember, rental property owners are not responsible for the personal belongings of their tenants.
For example, say a branch during a storm breaks a window when a tenant is not home and the rain coming in destroys their living room furniture. A building owner is not responsible for the storm or paying to replace the furniture. So without renters insurance, the renter would have to pay to replace his or her furniture.
Something tenants should keep in mind is the value of specific pieces of property, in the event a scenario like the above happens. Certain categories of belongings have their own claim limits so to ensure items are sully covered, they might need to purchase an endorsement or floater.
Leaks that lead to a lawsuit
Renters insurance typically includes about $100,000 of liability coverage, which protects the policyholder against costs associated with a lawsuit against them, including litigation related to leaks.
An owner is responsible for keeping a rental unit maintained and, in turn, tenants are responsible for notifying the owner, landlord or superintendent of any issues or damages as soon as they occur. They should also get those notifications in writing.
If an owner believes a renter caused a leak or failed to notify them in a timely manner, they are within the law to sue the renter. Regardless of the strength of the case against them, a renter would still incur legal expenses to defend his or herself.
Renters insurance would cover legal fees and any damages a policyholder is ordered to pay, which could be quite expensive.
No matter how careful a tenant is, a neighbor or a decrepit building might cause a leak that leads to a lawsuit against them. Using this portion of renters insurance to cover legal expenses related to a leak in not out of the question.
Leaks that force someone to leave their home
A leaks that force a tenant to leave their home are not impossible. If a storm tears a hole in or collapses a roof, the conditions there might no longer be livable. In that scenario, renters insurance would pay for a tenant’s housing and living expenses until they can return home.
The exception in this case would be a flood, which is not covered by flood insurance and a peril that is excluded from renters insurance coverage.
When a home is declared uninhabitable by an authority, renters insurance will cover the cost of a hotel and meals. Some even cover additional travel expenses incurred for a policyholder to get to and from work.
Depending on the individual circumstance, this could mean significant savings. A few nights at a hotel in a major city can easily total $1,000 or more and the for tab for eating out every meal can be expensive, too.
Especially considering the cost of coverage in the U.S. – the average annual renters insurance premium is $187.
Source: nasdaq.com
Accessibility