Why Renters Need Insurance
If you rent, your insurance needs are different than if you are a homeowner. Renters and condo insurance policies are designed specifically for those who do not have any insurable interest in the structures but do have property that needs to be properly insured against disaster.
What is Renters Insurance?
An HO-4 homeowner's policy, generally called renters insurance, is designed to provide coverage for liability and personal property, but does not include any coverage for the dwelling or other structures. HO-4 policies are designed expressly for renters, while the HO-6 policy is similar but intended for condo owners who own their apartment but do not own the building it is part of.
The Difference Between Landlord and Tenant Insurance
The owner of the building you live in is responsible for insuring their own property, but the coverage they buy, unlike regular homeowners insurance, does not extend to property owned by tenants or damages and in juries directly caused by them. For example, if the home was rented furnished, the landlord might have insurance for the appliances, but the tenant must get insurance for their own electronics and appliances, such as a microwave or television.
Insurance and Liability Concerns
Where liability is concerned, the landlord policy would cover things such as an uneven sidewalk causing an injury, but the tenant would be responsible if their child broke a neighbor's window while playing in the yard. The landlord is only responsible for damages or injuries that are related to the insured property, and the tenant is only responsible for injuries and damages related to themselves and their property.
Structural Insurance Situations
A leaky roof is an interesting point, to consider, though. In that situation, the landlord would be responsible for the leak and for any damages caused by the leak, including personal property belonging to the tenant. If the tenant had renters insurance, they could file the claim against their own policy but it would typically be referred back to the landlord's policy for final settlement.
Personal Property Insurance
Personal property is part of a standard home insurance policy, but it only includes the property belonging to the policyholder. Anyone else living in the home, including friends and tenants, must secure their own possessions with individual policies. They can either use renters insurance or purchase separate personal property policies, as they prefer.