Renters insurance important for both tenant, homeowner

We all hope it will never happen to us.

When you move to a rental property, many folks think that if there were a disaster such as a flood or fire or theft, the owners insurance would take care of their losses. Think again.

When we move people into a property, we let them know this very important fact: As a rule, owners insurance does not include tenant property, something even the owners of the property might not know. Insurance can be confusing and full of disclaimers that make it hard to understand exactly what is covered and what is not. It is important to sit down with your insurance agent and find out if you have the correct insurance for your property. This includes being covered for rental property, as opposed to having just owner-inhabited insurance.

It is also vital for renters to understand the importance of insuring their belongings. Again, the building is covered by the owners' policy; the tenants' belongings are usually not.

Awhile back, we had a tenant who had moved into an apartment we were leasing out. We let her know that she needed to purchase renters insurance, as her belongings were not covered. A little while later, a water heater lost its life and spilled its contents all over the apartment, seeping into her closet where she kept her prized and very expensive cowboy boots. She called us the next day, very upset and asked if they were covered under our policy. Sad to say, our insurance did not cover those boots, or any other shoes she had stored in the closet. Those boots were a $400 loss!

Renters insurance is easily afforded by most. It is available as a rider on your car insurance or even purchased separately.  If you are in need, you can call them for a quote. Make sure you know what you are purchasing. A low deductible and insurance for displacement would be a good thing to look into.

We had a condo that we were managing a couple of years ago. These tenants had purchased renters insurance, as advised. Later that year they realized the floor was really warm — and lo and behold, it was a slab leak! The hot water pipe had cracked under the concrete and began filling the condo with water. What a mess! Soon the carpet was soaked, the sofa and legs of furniture were under two inches of water and on and on. We called the plumber immediately, found the source and stopped the water. In the meantime, the tenants had sustained quite a bit of damage to their furniture and needed to relocate until we were able to mitigate the mess.

Due to their insurance, they had a hotel that was paid for, and their furniture loss was covered by their insurance. The only loss they incurred was their $250 deductible, which the owner was happy to pay.

Though this situation was difficult to maneuver through, we were all so glad that they were covered by insurance.

If you are a renter and don’t have insurance, or if you are an owner with a rental property, it may be a very good idea to look to insurance companies to help you fill this very real need.

Stephanie Wood is a broker and property management specialist with Preferred Property Management and Real Estate in Ventura. Do you have a question regarding rental property as a landlord or tenant? Send questions to stephanie@gowithpreferred.com.