North Carolina And The Renters Insurance Lease Clause
Let’s start with “what’s so special about North Carolina,” because it’s a very interesting question. In most states, there is an assumption that the tenant is liable for damage to the rented premises, accidental or otherwise. The cause of the damage really doesn’t matter. The premises belong to the landlord, and damage that you cause would require you to make the landlord whole by paying for the damage.
North Carolina has an interesting way of codifying that into statute, however. NCGS § 42-10 states that “a tenant… shall not be liable for damage occurring on the demised premises accidentally, and notwithstanding reasonable diligence on his part, unless he so contract.” At first blush, that sounds like a free pass for accidental damages like fire or water damage that you cause as a tenant, right?
Yeah, not so fast with that one. Read that quote again, particularly the end of it. “…unless he so contract.” That means that you can be held responsible for accidental damages to the apartment if you contract to be responsible. Why on earth would a person do that? Generally, it’s because in order to rent in North Carolina you pretty much have to waive your rights under that section. No landlord would rent to you otherwise, the risk is just too great.
Often, however, when you contract to be responsible for unspecified future obligations, you need to have some security in place in order to deal with that. When companies contract for such things, they generally have assets sufficient that performance of those obligations is not an overwhelming concern. Individuals, on the other hand, usually have no such assets and no real way to compel performance of an obligation that may be well into the hundreds of thousands of dollars.
That brings us to…
What Is A Renters Insurance Lease Clause?
If you’re renting in North Carolina, you’ll be expected to waive your rights under § 42-10 in order to rent, generally. In addition, there will be a clause in the lease requiring you to maintain North Carolina Renters Insurance throughout the duration of your tenancy. That ties back to the mention of security above.
A fire can destroy a building full of apartments in minutes, leaving hundreds of thousands of dollars of damages. You as a tenant are quite unlikely to be able to make good on those damages. In order to ensure your performance under your agreement to take responsibility for those damages, you’ll be required to have a renters insurance policy.
It’s not enough for you to say “Yes, I’ll pay for those accidental damages if they happen,” if you don’t have a way to do so. A renters insurance lease clause ensures that you are able to make good on that obligation, should it become necessary. It also simplifies the process of getting the money, as the landlord won’t be required to chase you for decades, a few hundred dollars at a time.
The renters insurance lease clause will generally require you to have a policy that covers at least a certain amount of liability, insures everyone in the household, and lists the landlord or their agent as additional interest so that they’ll be notified if the policy cancels, lapses, or otherwise does not remain in force. These are all perfectly reasonable things for the landlord to ask of you as a tenant.
What If I Violate The Renters Insurance Lease Clause By Not Having A Policy?
What happens if there’s a clause in your lease requiring renters insurance and you don’t have a policy? That depends when the landlord finds out. If they’re just auditing policies and find out that yours is not in force, you’ll probably get a fine, maybe a notice that you’re violating your lease. Ultimately, it will cost you more money than just having the renters insurance would have cost you, but those consequences are pretty tame.
If, on the other hand, there’s a loss that you’re responsible for, a couple of things will happen if you violate the renters insurance lease clause. First, the landlord will sue you for their insurance deductible. You won’t have any coverage for loss of use or for your stuff. The other residents (and their insurance companies) will sue you for their losses, both personal property and loss of use. If there are any injuries as a result of the fire or other loss, they’ll come after you, as well.
These are all things that your High Point, NC Renters Insurance policy can prevent. For the ten or fifteen dollars a month that it generally costs to have renters insurance coverage, you’re better off buying a policy. Otherwise, you’re looking at being responsible for hundreds of thousands of dollars in damages.
On the other hand, realize that you live very close to other people. When those other people have a loss, it impacts you, as well. Even if it’s just a small kitchen fire, you might lose use of your apartment for a few days. You also are likely to have smoke or water damage to your property. Do you want to replace that property out of your own pocket? The other guy’s liability coverage would pay the actual cash value, but you want replacement cost. Besides, depending how much liability coverage the person responsible has, you might have to stand in line and hope there’s some left for you.
Renters insurance in North Carolina is cheap. It’s also easy to get. Effective Coverage has made it possible to get covered right from your cell phone in just sixty seconds. You can get the coverage you deserve without spending time or money that you don’t need to spend. Just call (800)892-4308 or click to get covered - whether you need North Carolina renters insurance quotes online or coverage anywhere else!
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