Does Apartment Insurance Cover The Landlord? Img ©
We tend to hear two different versions of the question does apartment insurance cover the landlord? Either the tenant calls, asking
Does apartment insurance cover the landlord? I don’t want to pay to insure something that I don’t own, or to cover his liability, so I need to make sure I’m buying a policy that only covers me!
Or, it sounds something like this:
I’m a landlord, does apartment insurance cover me? If the tenant does something and there’s liability, is there coverage for me? Do I need to buy different insurance now that I’m renting my home to someone else?
Both are great questions, with different answers. Learn more after our California renters insurance video guide.
Does Apartment Insurance Cover Something I Don’t Own?
This is a frequent concern. If you’re searching for apartment insurance, you want to be certain that you’re covering your stuff and yourself, not the actual apartment building, right? In fact, that’s one of the reasons that apartment insurance is so inexpensive, because you’re not covering the building.
Glendale, CA Renters Insurance doesn’t cover the building itself, per se. By that, we mean that if the building were to burn to the ground for no discernible reason, the landlord would make a claim against his own insurance, which would pay the claim to rebuild the building.
But what if there were a reason for the fire? What if the loss were caused by tenant negligence, such as a kitchen fire or a candle left unattended? What if that tenant was you? Would the landlord’s insurance still pay for the building, or is that something your apartment insurance would cover?
Generally the way it works with apartment insurance is that the landlord’s policy will pay to rebuild after a fire or other covered loss. When the landlord accepts the settlement of the claim, part of that involves transferring his right of recovery to the insurance company in return for them indemnifying him and paying the claim. Indemnifying is a complicated way to say “making him not responsible for,” now that they’ve paid the claim.
The landlord’s insurance company will then look to exercise that right of recovery against the tenant who is responsible for the fire that caused the damage. That’s where apartment insurance becomes important. The landlord’s policy has paid out hundreds of thousands of dollars or more in damages, and they want to recover as much of that as possible. It’s now their right, as we saw above.
Does apartment insurance cover this? Absolutely. If you’re the negligent resident that started the fire, your apartment insurance covers defense against their claim, generally without those defense costs impacting your policy limits. If the claim is proven, or liability is accepted, your apartment insurance covers the cost of the claim up to the policy limit. Instead of the landlord’s policy chasing you for the next several decades to try to recover that money, your policy will pay those costs so that you don’t have to do so out of your own pocket.
Does Apartment Insurance Cover The Landlord’s Liability?
Nope. If have your landlord as an additional insured, your insurance policy will potentially defend your landlord if you’re both partially liable for a loss such as a guest who slipped on ice that you both had a duty to remove. But if the landlord is solely and personally liable for a loss, your apartment insurance isn’t there to cover his liability. It’s there to cover your losses and your liability.
You want apartment insurance that only covers you, right? Well, not quite. You don’t want to cover the landlord, of course, but you do want a policy that covers liability to third parties. If you damage the building through your negligence or if you cause injury to someone else through your negligence, you want to make sure there’s coverage and a defense under the policy. But does apartment insurance cover the landlord? Absolutely not. That’s not what it’s there for, and that’s not why you have it.
Don’t forget that apartment insurance is far less expensive than you think!
The national average price of renters insurance is just $187.00, according to the III. That works out to as little as fifteen dollars per month. The vast majority of families can budget renters insurance easily at those prices.
Additionally, it's important to note that renters are at a significantly higher risk of experiencing loss than homeowners. Renters occupy roughly one third of total housing stock in the country, and yet they are fully fifty percent more likely to experience theft than homeowners, according to the Bureau of Justice Statistics.
It only costs a few dollars a month to protect your family, and this cheap renters insurance is a great way to mitigate the additional risks that come with being a renter.
What's Your Insurance Language?
- Do You Need Renters Insurance ASAP? Check out the fastest way to buy renters insurance online and get covered in just 60 seconds!
- Do You Feel Like Talking About It? Just call Effective Coverage and a renters insurance expert can help you get great coverage in minutes.
- Do You Need Some Time Alone With Your Thoughts? We understand, which is why we created the California Guide To Renters Insurance.
- Just Want To Watch A Movie Together? See our Video California Renters Insurance Guide!
Does My Tenant’s Apartment Insurance Cover Me As A Landlord?
Nope. Your tenant’s policy is there to cover your tenant. If there’s a loss, the policy can respond with liability coverage, of course. But you still need to maintain your own insurance on the building and coverage for your own liability. As a matter of fact, it’s a terrible idea to ask your tenant to list you as additional insured on their apartment insurance.
Your own liability policy would offer the defense coverage that you’re looking for, you don’t need the tenant’s policy to respond for something like that even if you’re both partially liable because you both have your own coverage. Further, what happens when there’s a loss caused by tenant negligence for which you could potentially recover under the policy? Now you’re arguable a party to that policy, and liability is designed to cover third parties, not insureds of any kind.
Your tenant’s apartment insurance doesn’t cover you as a landlord, and that’s a good thing. Having your own landlord insurance means that you have full access to (and your insurance has full access to subrogate against) the tenant’s liability coverage if they cause a loss. That’s the whole idea behind a landlord requiring renters insurance, and it’s why you want to make sure that you maintain that separation. You should, of course, require that the policy notify you if it lapses or cancels, and that’s why you want to be an additional interest vs. additional insured.
Do I Need Different Insurance Now That I’m Renting My Home To A Tenant?
If you own a home in which you previously lived, and now you’re renting it out, do you need different insurance? Absolutely! Your homeowners policy, generally an HO-3, is not designed to cover the risks involved in a residence rented to others. It’s designed to cover the risks involved in living in that residence.
Does apartment insurance cover you now? Nope, that’s not what you need, either. That’s what your tenant needs. By the way, when screening tenants, people who already have renters insurance tend to be better risks than those who would need to buy a policy to comply with the Glendale Renters Insurance requirement of your lease.
If you’re renting out a home you used to live in, you should make sure you change to the correct landlord insurance policy. Effective Coverage can help with that. In some areas, there may not be much of a price difference but there’s certainly a difference in coverage. A homeowners policy would likely deny claims while the premises are vacant or rented, whereas a landlord policy is designed to protect against the very real risks you face.
If you’d like to ask does apartment insurance cover me, or if you need to find out more about the difference between homeowners insurance vs. landlord insurance vs. apartment insurance, the insurance experts at Effective Coverage have the answers you need. Just call (800)892-4308 or click to get covered - whether you need Glendale renters insurance quotes online or coverage anywhere else!
Effective Coverage offers the nation's only completely mobile platform to quote and purchase renters insurance right from your phone or tablet in just one minute. Get an online renters insurance quote today and protect your family.
Photo Credit: Kendyl Young DR_web CC BY 2.0