Renters Policy Is Landlord Insurance

Landlords should have a basic working knowledge of the insurance covering their buildings and most importantly the types of losses that are "excluded". Being familiar with the different forms and what you're getting for your insurance dollar can prevent disappointment and financial ruin should a loss occur.

One of these areas is the renters policy. Within the insurance business, this type of policy is called an "HO-4" and covers the personal property of the tenant for a host of different perils. Most important among these is fire, smoke, water damage (other than flood) and theft.

What many landlords don't realize, however, is that a renters policy can also help the landlord in the event of a loss, particularly under the liability section.

Along with the coverage on the tenants personal property there is also coverage for the tenant's personal liability. Personal liability coverage will respond if someone is injured while visiting the premises if the injury is due to the tenant's negligence.

This coverage might also be used to reimburse the landlord or the landlord's insurance company for fire damage to the building the tenant occupies if the fire was due to the tenant's negligence.

Without a renters policy, arising from the tenant's negligence will most likely be paid solely by the landlord's insurance policy.

It is for these reasons more and more landlords are requiring their tenants to carry renters coverage and are making this a stipulation within the lease agreement.

Unfortunately, there are still a very large majority of renters who carry no coverage whatsoever, and are left with virtually nothing after a devastating loss.

By requiring a minimum level of renters coverage, the landlord is not only helping the tenant, but also helping himself.

A few minutes invested in reviewing your insurance policies and understanding the coverages can pay big dividends if you are the unfortunate landlord who has a property loss.