Landlord Tenant Q&A with CATHERINE M. MATTHEWS (R)
CATHERINE M. MATTHEWS (R), GRI
Broker-In Charge, Callahan Realty, Ltd.
Past President, Oahu Chapter
National Association of Residential Property Managers
Q. My Landlord is recommending that I get Renter’s Insurance and telling me it is important for me to have. Can you please tell me why? I would think a landlord should have insurance that would cover the property he owns. I just rent.
A. Renters Insurance protects you and your belongings. There are typically several types of coverage in a renter’s policy. The first protects your liability. For example, if a carpet cleaner comes over and falls down because he trips over something of yours, you could be responsible for his medical bills and lost wages.
Renter’s Insurance would cover this claim if you are deemed liable for it. The liability portion also covers you if your pet bites someone, although you must let your insurance company know in advance about having a pet. It also covers liability incurred by family members. However, the liability portion does not extend to automobiles, which require separate insurance.
There is also contents insurance. This protects your belongings from plumbing related water damage. For example, if the hot water heater breaks and floods the home and your Oriental rug and sofa are damaged, you would be covered. The owner’s insurance will not cover the cost to replace your items, nor is the owner responsible for this expense. Contents insurance also covers fire, lightning, and smoke damage. You can get smoke damage even if there is a fire nearby and not in the home or unit you rent. Additionally, it covers theft, vandalism, windstorms, riots, and electrical surges.
You can also get additional living expenses coverage. This helps you if your home or unit is deemed uninhabitable. Although the landlord would be required to house you elsewhere, this would help reimburse you for other things above normal rent.
In choosing Renter’s Insurance you can get Actual Cash Value, this takes into account your belongings, the cost and age, and depreciates them accordingly. You are then responsible for any additional cost between the depreciated amount and the cost of replacement. You can also get Replacement Cost which takes into account the loss and replacing it at current pricing. In either event, you should document all of your belongings with pictures or videos, when you purchased your items, and how much they cost.
You must read your policy carefully and discuss it with your insurance agent. Please keep in mind, I am not an insurance agent and these are general guidelines of what to expect from your policy. There may be limits on jewelry or electronics, and you can discuss additional coverages for specific items with your insurance agent.
Since many landlords require Renter’s Insurance, it would be prudent to obtain it. Renter’s Insurance can be relatively inexpensive, especially when bundled with automobile insurance.