Renters Insurance: Cost, Coverages, Requirements & More - ProgramBusiness

What is Renters Insurance & Who Needs It?

Renters insurance is specific insurance coverage for tenants who rent their housing. Landlords sometimes carry renters liability on their units. More often, they require their tenants to maintain a minimum renters liability policy.

Tenants cannot rely on their landlord's building policy to cover their losses for fire, theft, weather, and other disasters. The individual renter's responsibility is to carry insurance for liability exposures and protect their personal belongings against losses. That's because a landlord's policy only covers the actual building and excludes the personal property of its tenants. Also, renters are liable to cover any damages they cause to their unit or the building.

Another type of renters insurance is the 1 - 4 Family Dwelling coverage for real estate investors. It gives them options for a renters insurance program package or monoline general liability coverage for owned single or multi-family dwellings they rent to others.

What Does Renters Insurance Cover?

Renters insurance policies cover ordinary losses like breakable appliances, water, fire and smoke damage, theft, and loss of use. The amount of protection offered varies by insurer with some providing comprehensive coverage, while others limit their offerings to specific categories. Most policies provide replacement cost coverage for furniture but exclude jewelry, firearms, or expensive electronics and clothing, such as furs, and may also put limits on the number of times the insurer will replace lost items.

Types of Renters Insurance Coverages

A typical renters insurance policy covers the following four types of losses:

Personal Property
Personal liability
Additional Living Expenses
Medical Payments

Some renters insurance programs offer landlords a solution that allows residents to purchase renters insurance with their monthly rent. The option includes automatic tracking for policies to assure they are up-to-date while also eliminating coverage gaps.

Personal Property

Personal property coverage includes nearly all of a renter's possessions in and outside their rental unit. It pays for damages up to the policy limits for the named perils it protects. These perils include fire, lightning, wind, hail, vandalism, theft, smoke damage, water damage caused by frozen pipes, faulty plumbing and appliances, snow and ice collapse, mold, and falling objects.

Liability

Liability protection covers the costs of a lawsuit when someone suffers an injury or damage to their property while visiting the renter's unit. Common types of claims are for slips and falls and dog bites. Typical liability helps pay for settlements and legal defense fees with standard policy limits of up to $100,000 for liability claims paid by insurance carriers.

Additional Living Expenses

Renters insurance will pay for expenses above and beyond a tenant's customary living expenses if their rental property becomes uninhabitable due to a named peril. This protection is also known as loss of use coverage. It will pay to cover the cost of food that exceeds what a policyholder usually pays for meals. Loss-of-use insurance can cover extra expenses for the cost of gas when the insured is driving more because of temporarily living further away from their job.

Medical Payments

Medical payments cover bodily injury claims from individuals. It helps make them whole without determining the fault or responsibility for the injury, which streamlines and simplifies the process of filing claims against the liability portion of renters insurance.

Renters Insurance Programs for Property Owners

Depending on circumstances, investors and landlords will purchase renters insurance programs for their rental properties. An example is a 1 - 4 Family Dwelling policy with options for real estate investors to buy a renters insurance program package or monoline general liability coverage for owned single or multi-family dwellings that they rent to others.

Best Renters Insurance Programs

For agents seeking the best renters insurance programs, the Program Business Market Directory is the place to start. ProgramBusiness.com serves the needs of agents and markets participating in the insurance distribution system for specialty programs.

Agents using the Program Business directory for a quick lookup for renters insurance programs will find Osprey Underwriters. Since the 1990s, it has developed niche insurance programs for agents via traditional and alternative risk transfer mechanisms. Osprey's structure distributes through affinity groups, industry associations, and appointed broker networks on branded and non-branded basis. It also specializes in developing structured insurance-centered risk management solutions on a needs basis.

Osprey Underwriters Offers Investors And Landlords These Coverages:

1-4 Family Dwelling Product:

The product covers one-to-four family tenant-occupied dwellings and two-to-four owner-occupied family dwellings. The product is available on either a DP-1 Basic Form or DP-3 Special Form. Maximum total insured value for property of $1,000,000 and liability limits up to $1,000,000 are available.

Condominium Unit Owners Product:

Available for an owner or tenant-occupied condo or cooperative units. Short-term (nightly, weekly, monthly) and seasonal rentals and occupancies are eligible for coverage. Our HO-6 product is available with Coverage A limits up to $500,000 and content limits up to $200,000. Loss of rents and loss assessment coverages are available up to $50,000, and liability limits are available up to $1,000,000.

Renters and Senior Tenant Product:

Available for residential renters of apartments, mobile homes, or dwelling units. Osprey's HO-4 product is available with contents limits up to $200,000, and liability limits are available up to $1,000,000. Enhancement endorsements available include a pet damage extension and renter's protection plus endorsements.

Vacant Building (Personal Lines)

Its Vacant Building product is coverage for residential vacant homes or condos. This product offers 3, 6, 9, or 12-month policy terms, either as monoline or package, with no length of vacancy restrictions. Special Form and replacement costs are available for properties 25 years or newer. Both Special and Basic Forms include vandalism coverage.

Vacant Buildings And Vacant Land (Commercial Lines)

No restriction on the length of vacancy
Total insurable value range from $3 million to $5 million
Can consider vacant land, vacant buildings, partially vacant buildings, vacant condo units, vacant leased space, and risks with renovations – commercial or residential risks eligible
No minimum earned premium, even for short-term policies

Property Managers Errors And Omissions

Product Features:

Coverage for the management of the insured's personally owned property

Ability to package errors and omissions, tenant discrimination, employment practices, and general liability, and business personal property
Wrongful eviction coverage automatically provided for residential properties
Classes:
Commercial
Residential

Real Estate Agents Errors And Omissions