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Renters Insurance VS Landlord Insurance — What’s the Difference?

While renters’ insurance and landlords’ insurance are both necessary, the two differ considerably. Renters insurance covers the belongings of the person renting the home or apartment. Landlords’ insurance, on the other hand, covers the liability associated with the rental property and losses associated to the rented building or dwelling. In either case, gaining a firm understanding of both types of coverage is a great help when renting a property.

What is Renter insurance and what does it cover?

Renters’ insurance is purchased by the tenant to cover the loss of his/her/their belongings or to cover the cost associated with a lawsuit if someone is injured while visiting. If the rental property sustains accidental damage caused by the tenant, renters’ insurance could cover the repair expenses. There are three types of coverage in this.

Personal Property Coverage

Your belongings, such as furniture, clothing, valuables, and electronics, would be covered in the case of theft, fire, or another catastrophic event Up to a specified limit mentioned in your policy. This is a common standard policy that is also subject to a deductible.

Liability Coverage

This type of coverage protects the landlord in the event of an accident that happens on the rental property. If a visitor sustains an injury while on the rental property, then he or she may sue the tenant and landlord to recover medical expenses. Liability coverage helps to cover this cost for the landlord. Liability may cover tenants’ liability to accidental damage to the rented property. Liability may cover pet attacks caused by tenants’ pets. Not all insurance policies are the same, check with your insurance agent or refer to your insurance policy for details.

Additional Living Expenses Coverage

Additional Living Expense Coverage helps with expenses if the rental property becomes unhabitable due to fire, plumbing issues, or another catastrophe. This option covers moving cost, storage, hotel accommodations and food expenses if you need to find another place to stay temporarily.

What is landlord insurance and what does it cover?

Landlords’ insurance is similar and, at the same time different from home insurance. If you are a homeowner, your home insurance covers damage to the house that you occupy; whereas, if you are giving your house on rent, you’ll need landlord insurance to cover a liability that you face as owner and manager of the property that is rented out to tenants. A landlords’ insurance policy consists of two types of coverage: liability and structural.

Liability Coverage

This type of coverage protects the landlord if an accident occurs on the rental property. If the tenant and/or a visitor sustains an injury while on the rental property, they can sue the landlord to recover medical expenses. Liability coverage helps to cover this cost for the landlord.

Structural Coverage

As the name suggests, structural coverage pertains to any damage to the home itself, including plumbing, fixtures, and other furnishings, provided by the landlord. The most crucial aspect to remember is that there are two distinct selections for this type of coverage, which includes Actual Cash Value and Replacement Cost. The actual cash value would cover repairs of replacement of the structure minus depreciation and obsolescence. Basically, this option factors in the normal wear and tear that comes with an aging building.

The Replacement Cost covers expenses for repairing or rebuilding the house in the situation of a covered loss. This coverage differs from the ACV because it factors in the actual price of replacing the structure and furnishings.

Do You feed Renters or Landlord Insurance?

If you’re renting an apartment or house, you should invest in renters’ insurance to cover the loss of your possessions or court settlements for damage or medical expenses. Likewise, if you’re the landlord, you’ll need coverage for the rental property itself and liability. An experienced licensed insurance agent can help navigate that process. Purchasing the appropriate coverage is easy when you are working with a professional insurance company like Abe GT & Associates. Life is unpredictable and can be costly when you have to pay for unwarranted expenses completely out of pocket. Professional agents at Abe GT & Associates help you navigate distinct types of coverages. Contact us for any insurance product quote or more detailed coverage guidance.

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