Renter's vs. Rental Property Insurance

3 Replies

Hey guys,

Newbie Rental investor here. I am prepping my first property for rent and I have a couple of questions that I'd like some opinions on.

1) I set up rental property insurance, but I disagree with the amount the insurance company wants to insure if for. I'd like opinions on your strategy for balancing monthly cost with overall risk of loss.

2) How do rental property insurance and renter's insurance overlap? I plan to require renter's insurance, but I don't want to waste money covering things in my property insurance that would be covered by the renter's insurance.

Thoughts?

Renters insurance covers their personal property plus accommodation cost if they are temporarily forced to relocate. Tenant liability insurance protects you in the event there is a tenant or guest liability issue. Your insurance protects your property and you.

Renter content insurance is not necessary but you must insist tenants have liability coverage of a minimum 1M. 

Renter and owner insurance do not overlap.

Thanks for the help Thomas. One last question. I have Personal Liability coverage on my policy. What is the difference between that and Tenant Liability Coverage? It seems to cover the same thing, but it would be their insurance covering first, or am I incorrect?

The insurance replacement cost, where (for example) your $100,000 rental is insured for $200,000 to replace it, is not an outrageous amount.  If you were to experience a loss, you may even find they lowballed the number. 

I disagree with the comment about requiring the renter to have 1M liability, the standard renter's liability is all they need. 

There's no overlap in coverage, but the renter's policy is protective of them coming after you or your insurance for possible damages.  "I had $50,000 worth of electronics destroyed by the burst pipe caused by the bad plumbing on the rental"  "Good thing you have renter's insurance, you're welcome."