In the whirlwind of moving into a new rental property, it's easy to overlook the importance of tenant's insurance. After all, you've just signed a lease, paid a security deposit, and are busy planning the layout of your new home. But what if I told you that tenant’s insurance isn’t just another added expense, but an incredibly important part of moving out? Take it from someone who had to learn it the hard way, tenant insurance should be a top priority when you move out. Without further ado, here are the three reasons I wish I had purchased tenant insurance when I first moved out:
- Building an insurance history
- Getting covered for liability
- Getting covered for disaster
Building an Insurance History with Tenant Insurance
One of the lesser-known benefits of tenant insurance is its role in helping you build a property insurance history. Just like a credit history, a property insurance history can be crucial in securing favourable rates and coverage when you eventually become a homeowner.
When you have tenant insurance, you're not just protecting your personal belongings; you're also demonstrating to insurance companies that you're a responsible and low-risk individual.
This can be particularly helpful if you're planning to buy a home in the future. A positive property insurance history can make you a more attractive candidate to insurers, potentially leading to lower premiums and better coverage options. As someone who is looking to purchase a home in the next 1-3 years, it would have been to my advantage to have had an extra 2 years of property insurance history under my belt.
If you're renting a property and your landlord requires you to have tenant insurance, having a history of property insurance can make it easier to find a new rental property in the future. It can also provide peace of mind to landlords, as they know you're financially protected in case of an accident or emergency.
How Tenant Insurance Protects You From Liability
One of the most important aspects of tenant insurance is the liability coverage it provides. Liability coverage can protect you from financial ruin if someone is injured on your property or if you accidentally cause damage to someone else's property.
If you plan on having friends or family members at your house when you start living on your own, you’re going to need liability protection. Imagine a friend comes over to your apartment and trips on a loose rug while they are holding a bag full of expensive electronics (hyperbolic I know but bear with me). The property damage to your friend could easily be thousands of dollars. If they were to sue you for the damages, your tenant insurance liability could cover the damages. Without tenant insurance, you could be held personally financially responsible for covering those damages. I’m not sure about you, but when I first moved out, I certainly didn’t have thousands of extra dollars lying around to pay for lawsuits.
An extra little bit of information is that your property liability coverage protects you outside of your home. More information on how your property liability coverage is available here.
Tenant Insurance, Because Disasters Suck Without It
On the off chance that you found building an insurance history and getting liability protection uncompelling arguments, I have one last trick up my sleeve.
Tenant insurance can be a lifesaver in a disaster. In the summer of 2020, deep into the pandemic, my first-floor apartment flooded. A heavy summer rainfall caused 3-5 inches worth of water to end up in my apartment. The damages were quite extensive to the unit and my personal belongings. All of the floors, the baseboards, and the bottom 4ft of drywall had to be removed in the entire unit. Remarkably, all of the appliances survived the flood.
Amongst my personal belongings that were lost were rugs, couches, desks, chairs, a computer, a printer, nightstands and a whole plethora of miscellaneous items were lost also. For the items that weren’t destroyed in the flood, they had to be moved out on short notice. Since I didn’t have a spare apartment lying around, I had to hire a moving company to move the remaining belongings out and put them in storage. As a college student making minimum wage, I didn’t have the $1,200 kicking around to spend on movers. Thankfully, the bank of Mom and Dad helped me out on that one.
Once all of my belongings were packed up and shipped out, I obviously couldn’t stay where I was living. This led me back into my old bedroom at my parent's house. While it was certainly a bit of a kick to my pride, I was very fortunate to have a family to fall back on when things went bad.
Once everything was packed up, torn out, and gutted, the next step was repairing all of the damages from the storm. However, since it was the peak pandemic, virtually nothing happened quickly. Here are just a few delays that happened throughout the repairs:
- After everything had been cleared out, the unit flooded again which meant the ventilation fans needed to be brought back in.
- Asbestos was found in the glue under one of the carpets in the closet, causing a separate remediation team to come in.
- Flooring options all had to be ordered (60-90 days for any options due to supply chain issues).
All in all, the unit was out of commission from July 2020 until February 2021. If I had been properly insured with a tenant insurance package, I could have had the following benefits and coverage: temporary living expenses, storage expenses, and compensation for my lost belongings. All in all, a tenant insurance policy that would have probably cost about $25-$35/month could have saved me several thousand dollars, a great deal of embarrassment, and valuable time.
Conclusion
If you or someone you know is moving out for the first time, make sure a tenant insurance package is on the list. When purchasing a tenant insurance package, you can discounts for bundling your auto insurance with your tenant insurance. If you're looking for easy coverage on tenant insurance, talk to a broker at Armour Insurance today, it could end up saving you big.
