Renter's Insurance Help

22 Replies

Hello BP Fam,

*Short Post Alert*

I just moved into an apartment (renting) for a short time (no longer than a year) while I save to purchase a property for myself. My landlord is requiring me to get renter's insurance of at least $100,000 of coverage per occurrence. Any recommendations on companies that provide cheap plans?

I live currently reside in Miami, if that helps.

Thanks,

Tim
 

Wow... a minimum of $100K per occurrence? In our area I have never heard of that being required by a landlord. Renter's policies usually are there just to cover your personal belongings and if anything major happens to the property (flooding, fire, vandalism) it is covered by the landlords policy... even if it was caused by the tenant.

@Timothy Lewis I think it’s a slight miscommunication. The liability limit is $100K on a standard renters policy.

I would reach out to your auto insurance provider. They should be able to get it for you for $10-12/mo. I recommend Allstate to my tenants, but most all providers offer it.

It protects you and your stuff. If a guest trips and falls in your apartment, or there’s a fire, you’re protected.

Any place that I can recall renting, has required more than $100k & also required to show proof.  That's a reasonable number, imo, to protect the building (not just the rented unit) from damage from a tenant.

"Any recommendations on companies that provide cheap plans?" - I look at this as, you get what you pay for.  A company that specializes in cheap, inexpensive plans probably specializes in not paying out in a claim.  I would go with a well know company, one that I would plan on using for years to come.  Let them know you're wanting to be a landlord.  It's your chance to interview them, find out what they'll do for you.  I would look further than just the monthly expense.  Our renters, auto, & personal coverage policies are with the same insurance company as one of our rentals.  Have been using them since the mid to late 90's.

Best of luck to you!  Are you going to be investing in the Miami area?

@Timothy Lewis

Expanding a little on previous comments.

Your policy will most likely have:

Personal property with a min coverage in the area of $15,000

Personal liability with a min coverage in the area of $100,000

Medical payments with a min coverage in the area of $1,000

Call whoever carrys your personal auto. I know with State Farm, the Multiline discount saved more than the renter's policy cost. If it didn't, you didn't have high enough policy limits on your auto.

Disclosure: I am a former State Farm Agent and a current policyholder.

State Farm, GEICO, Allstate are all good options. You may also want to check to see if Lemonade offers renters insurance in your area. They just went public and have a somewhat unique business model.

Tim, This is a great time to start building a relationship with a good Insurance agent and agency. I recommend looking for an independent agent (they represent many companies not just one). Even if they are not the lowest price its a good start, Also, an agency that handles both Personal & Commercial insurance would be better in the long run. If you get into any flips or if you buy apartment or commercial bldgs. they can help. If you can find one that does a lot with investors or contractors they probably have more of the expertise you will need going forward,
Originally posted by @Jon Reed :

Wow... a minimum of $100K per occurrence? In our area I have never heard of that being required by a landlord. Renter's policies usually are there just to cover your personal belongings and if anything major happens to the property (flooding, fire, vandalism) it is covered by the landlords policy... even if it was caused by the tenant.

As a landlord, you never want to have to invoke your insurance. Assume tenant screws up an causes damage above what could be paid out of pocket.

Option 1: Tenants Renters Insurance policy covers the repairs. Tenant's premiums go up and/or the policy gets cancelled.

Option 2: Landlord's policy covers the repairs. Landlord's premiums go up and/or the policy gets cancelled. This can also affect all your policies for all your properties. 

As the landlord, which option sounds better to you? 

How would a renters policy cover something that might happen to a building? Would that not fall under the LLs policy and that ins co might go after the tenants policy..... but I have thought that renters ins is to cover tenants belongings , and some personal liability....... it also will cover if say there is water damage and the tenant needs to move out , it will cover costs not covered by LL (if it were something covered under LL policy) 


could one of the Ins agents help clarify please?

I would get a quote from however you currently have auto insurance with; you may qualify for a multi-policy discount. The $100,000 limit is more likely for liability. Landlord often require this so they don't have to make a claim on their policy, protecting their insurance score. You shouldn't have a problem getting a policy for around $10-25 a month. It's a win for you and the Landlord to have the coverage!

@Mary Mitchell

Let's say the tenant causes a kitchen fire. If they have a renter's policy, it will carry $100,000 in property damage. So the renter's insurance can pay out to fix the damage caused by the tenant, replace the tenant's damaged items, plus pay for the renter to stay in another house or hotel until the work is completed.

Their renter's policy will also carry liability coverage as well, which can come in handy if their pet bites someone, etc.

I require all my tenants to carry it, with $500,000 in liability and being in Michigan, I require them to carry the backup of sewer and drain endorsement as well. Make sure they list you as additional insured so if they cancel the policy after a week, you will receive notice.

@Mary Mitchell

You ideally want to avoid a claim on your own policy unless it's unavoidable. A claim usually impacts your rates for 5 years, it even can on policies at other addresses as well. Plus many companies will deem you ineligible if you have a single claim on a rental dwelling in the last 2-5 years. Plus, if it's for anything other than a liability claim you will be responsible to pay your deductible, which is usually $1,000 or more. If the damage or loss occurred because of the tenant's own doing then they can be responsible to pay the typical $500 deductible. There are obviously exceptions, but I mostly referenced the industry norms here.

@Emanuel Ohunwu

They can give your name or LLC and list either business or personal address for notifications. I require them to e-mail me proof of insurance with my LLC listed before they get keys. If they make any policy changes, cancel, or anything you will recieve notice via mail.

When you get the original declaration page it will clearly show you listed as additional insured.

Originally posted by @Emanuel Ohunwu :

@Blake Weldon To have my tenants add me as additional insured on the policy do they just give my name and address to their insurance company?

 Additional Interest, not insured. Two very different things.