If you rent, you’ve probably been told that you’re required to have renters insurance. Some misinformed person may even have told you that there’s a state law mandating it. Does state law require you to have in order to live in an apartment? What other impacts can state law have on your coverage?
The leasing agent told me that renters insurance was a state law for an apartment in buildings with more than four units. and then got an attitude reminding me that “tenants have responsibilities too, you know!” I didn’t rent from them because of that leasing agent’s attitude, but I just assumed she had been correct about the law. Little did I know!
That story was told to us by Heather, who has College Station, TX Renters Insurance because she believed that she was required to. But she looked for the state law and couldn’t find it, and then realized that Texas tends to regulate as little as possible in most areas. That’s when she got suspicious and called us to ask about it.
We quickly clarified things for Heather. There is no state law anywhere that requires you to have renters insurance. Anyone who tells you otherwise is either misinformed or intentionally lying to you rather than explaining why the property management company requires renters insurance. While one is accidental and the other is malicious, it doesn’t change the fact that there just is no law requiring the coverage.
How Does State Law Impact Renters Insurance?
State Law And Renters Insurance Prices
State law impacts the way in which renters insurance prices are set. For two contrasting examples, Texas operates under what’s called a “file and use” system. The company files their proposed rates with the state, and they can begin to use those rates immediately.
The approval process happens afterwards, and generally those rates are approved as filed. Refunds can be issued to policyholders, as in one State Farm Lloyds Texas refund case, but that’s comparatively rare.
Contrast that with a state that has a Rate Bureau maintaining an iron grip on renters insurance rates in the state, and you’ll see how different types of regulation can lead to not only different rates, but also to greater or lesser availability of coverage in the state. Texas renters insurance is easy to get. In a state with a Rate Bureau, that’s not always the case.
State Law And Renters Insurance Coverage
In Texas, companies can write their own policy forms. This means that, while policies generally cover similar perils and similar types of losses, the language surrounding that coverage may be substantially different from what you expect. In other words, buyer beware. Again, this system seems to work well for Texas.
Other states expect that companies will generally stick with the standard state policy form, making only minor changes to it. These changes are in the form of an endorsement for the state, as we’ll see in a moment.
State Law And Renters Insurance HO-300 Endorsements
The HO-300 is the state-specific endorsement used to bring a standard policy form into compliance with state law and regulations. It’s commonly on every policy sold in a state, and it varies between states. In some cases, the changes are minimal and in some cases they’re substantial.
This is why it’s crucial to read your policy, including all of the endorsements. You’re responsible for knowing generally what the policy does and does not cover, of course. The best way to know that is to read the policy. The HO-300 isn’t generally a long endorsement, and it makes reference to the parts of the policy that it changes. You could find anything from how unearned premium is handled to the definition of an intentional act in this endorsement, depending on your state.
The HO-300 isn’t the only endorsement specific to your state. If there’s an animal liability exclusion, for example, that endorsement is likely to be specific to your state in order to comply with case law and the wording of state law in regards to that type of liability. Different states handle liability and negligence under different theories of law, so that makes sense.
State Law And Renters Insurance Cancellation
State law also impacts your renters insurance if it’s going to be cancelled, whether that’s initiated by you or by the company. Cancellation for non-payment requires specific notices to be sent. Cancellation for a change in risk requires a different set of specific notices to be sent. Cancellation by the insured may need to be in writing, or follow a certain form.
In addition, the way in which premium refunds are handled may vary based on state law. Is there a minimum earned premium if the policy is cancelled early in the policy term? Is there an MGA fee or other fees which are considered to be “fully earned” even if the policy was only in force for a day? Was there a policy fee paid to the agent? Is that fully earned? All of these will vary based on state law.
As you can see, state law definitely has a significant impact on your College Station, TX Renters Insurance, and on renters insurance anywhere in the country. While no state law mandates tenants have renters insurance, every state mandates that tenants comply with their lease.
As a result, if your lease requires renters insurance, state law requires you to comply with the terms of the lease and get renters insurance. Failure to do so puts your tenancy at risk. We know of at least one large regional property management company which gives a three-day notice to vacate to any tenant discovered not to have renters insurance in force at any time.
Is it worth risking having to move just to spite your landlord? Is it worth not having the protection you deserve when renters insurance is so very affordable in every state? No. If your lease requires renters insurance, you should treat it as a mandate, because that’s what it is. Fortunately, the coverage is affordable and easy to get.
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.
To get covered in just sixty seconds, or to get answers from the insurance experts for renters, just call (800)892-4308 or click to get covered - whether you need College Station, TX renters insurance quotes online or coverage anywhere else!
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