From time-to-time we meet people renting homes who have no insurance over their personal property kept therein. This can be an expensive mistake given the cost of computer equipment, and home entertainment systems. Even if the premises are commercial a few imagine the landlord’s insurance covers their stock. Unfortunately, nothing could be further from the truth.
What Landlord’s Insurance Policies Do Cover
Landlord’s insurance is only there to protect the landlord’s assets. If they own the building this covers the structure, and the fittings intended to be permanently attached. If they are subletting, this may only include any contents that they added. However, in both instances the cover also protects them against liability claims up to the stated amount.
No insurer will issue a policy insuring a tenant’s interests. The logic behind this is insurers only cover clients they choose personally, with the option of charging higher rates for those with high risk profiles.
Moreover, if a tenant is not paying for their insurance, they have no deductible. In that case, they may have no motive to exercise due care.
How a Solid Renters Insurance Policy Closes the Gap
Renter’s insurance, by contrast does not cover loss of, or damage to the building, and / or the fittings intended to be permanently attached. This is because they would not suffer a loss against which they could claim.
Therefore, it only covers their personal property they nominate on their policy. However they potentially have a greater risk their renters insurance should also cover.
Most rental contracts also have a force majeure clause. This absolves the landlord from having to fulfil the contract if something unforeseeable prevents them. This could for example be a ‘superior force’ such as severe weather or a fire.
In fact, that’s exactly what ‘force majeure’ means in French. This type of renters insurance compensates for the cost of having to stay somewhere else.
Finally, a prudent tenant also takes out tenant liability cover. This should protect them if they accidentally or negligently damage the lease premises.
In that case, if they leave a tap running or their barbecue sets the roof timbers alight they can ask their insurer to pay the bill. A prudent landlord should insist on a tenant having this cover.
Disclaimer: Stonegate Equity provides the above information in good faith. However it is not intended to be professional insurance advice.