Tenant's Insurance
Many insurance companies offer big discounts!

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Landlords and property managers should make every effort to insure that their tenants realize the necessity of purchasing their own renter's insurance. Tenants must clearly understand that a landlord's coverage does not extend to their liability, or to replacing their own personal property for a loss occurring from risks like fire, vandalism and theft.
        Tenant's insurance, like homeowner's, is a package of several types designed to cover more than one risk. The cost of each insurance company's package will vary and the coverage may be slightly different. There may also be exclusions, the dollar amounts specified and the deductible will also change from one company to the next. Tenants who live in a flood, mud, or earthquake area will need to pay for extra coverage.
        The renter's policy is relatively inexpensive because both policy limits and risk will be much less than for a homeowner. The coverage on a building accounts for a major portion of the owners premium. Tenants only need to insure against losses to their own property, with limits likely to be from $20,000 to $50,000.
        Most renter's policies also include personal liability coverage; $100,000 is a typical amount for a tenant, while a homeowner usually carries $300,000 for injuries or damage caused by the insured. If a tenant's water bed leaks; or their kid breaks a neighbor's antique stained-glass window; or a guest is injured on the rental property due to the tenant's negligence; their tenant's insurance should cover the loss and any necessary legal defense.
        Tenant's policies are quite similar to homeowner's contents and liability insurance and they will likely have deductibles of $250 or $500. When a tenant has a loss, the insurance company will pay only for the amount of that loss over and above the deductible amount.
        Renter's insurance will also help limit lawsuits against landlords when a tenant suffers a loss from most causes, including burglary and theft. It also means that the tenant's insurance company will often help defend lawsuits resulting from third party claims for injury or damage in or about the demised premises.

Here is the good news: the insurance will likely cost the tenant very little!
That's right ... and here's why.

      Auto insurance is the only causality policy many tenants have. When they buy renter's insurance they become eligible for multi-policy discounts that are now available from several well known companies that will save them a substantial amount of money.
      Allstate offers a whopping discount of up to a 26% on auto and 12% on homeowner or tenant insurance when they write both policies for the same insured. Farm Bureau is planning a 5% discount on each policy when they write both types. Many other companies have similar programs.

        A auto policy will usually cost between $800 and $2,000 a year. A $20,000 tenant's policy should cost about $150 per year. If the tenant has a late model car, and a good driving record, they could even get money back after the discounts.

So ... why don't all tenants have tenant insurance?
Only because they don't have the necessary information!

        Commercial property managers insist that all of their tenants carry insurance. Perhaps residential landlords should do the same thing. The result will be - what folks in the sales profession call: "Win-Win".

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