RENTERS' INSURANCE

Most tenants do not realize their need for renters' insurance until it is too late.

The upstairs tenant caused a water overflow, which seriously damaged furniture and clothing.  While the negligent tenant may be sued, it is easier for an insurance company to handle the situation.  A rainstorm caused the county storm sewer system to back up, flooding basement apartments.  Not only is there damage to the tenants' property, but they have to go to a motel while their apartments are being repaired.  A plastic container fell on a lighted stove resulting in $800 smoke damage.  An apartment is burglarized.  A guest is injured.  Occurrences such as these can be expensive for an uninsured tenant. 

Many tenants believe that their landlord's insurance will cover their losses, but this is hardly ever so.  Such insurance covers damage to the landlord’s property and protects him against the claims of negligence.  The landlord may also have a substantial deductible, so that a tenant who negligently damages the landlord's property may be required to cover the deductible.  The landlord's insurance company can also sue the tenant for the full extent of the damage if the tenant is proven negligent. 

A tenant needs to be aware that standard renters' policies cover structural damage to the tenant’s apartment caused by fire, smoke, and explosion, but do not cover damage done to the apartment that is normally covered by a security deposit, such as stains on wall-to-wall carpeting, damage to appliances, etc.  Liability for damage to other apartments, such as water damage, and to other tenants' property will, however, be covered by most policies. 

Most commercial insurance companies offer renters' policies that protect furniture, household contents and personal belongings against fire, vandalism, theft, water damage, etc., as well as the costs of living elsewhere while repairs are being made.  Coverage for storm sewer back-ups is optional coverage and requires an additional fee.  These policies also provide personal liability coverage for medical payments to others, costs of defending suits, etc.

A tenant should carefully list and describe all personal property and the cost of those items.  Receipts should be kept as proof of those costs.  Photographs or videotapes of property would also be valuable documentation.  Such documentation should be stored outside the apartment in a safe place. 

Tenants should compare several policies and choose one suitable to their needs and pocketbooks.  A reasonable basic policy may be obtained for $150-$200 per year.

Click here to see what Maryland Law says about this issue