Renters' insurance, often called tenants' insurance, is an

insurance policy In insurance, the insurance policy is a contract (generally a standard form contract) between the insurer and the policyholder, which determines the claims which the insurer is legally required to pay. In exchange for an initial payment, known as ...

that provides some of the benefits of

homeowners' insurance Home insurance, also commonly called homeowner's insurance (often abbreviated in the US real estate industry as HOI), is a type of property insurance that covers a private residence. It is an insurance policy that combines various personal insura ...

, but does not include coverage for the dwelling, or structure, with the exception of small alterations that a tenant makes to the structure. It provides

liability insurance Liability insurance (also called third-party insurance) is a part of the general insurance system of risk financing to protect the purchaser (the "insured") from the risks of liabilities imposed by lawsuits and similar claims and protects the i ...

and the tenant's

personal property property is property that is movable. In common law systems, personal property may also be called chattels or personalty. In civil law systems, personal property is often called movable property or movables—any property that can be moved fr ...

is covered against named perils such as fire, theft, and vandalism. It also pays expenses when the dwelling becomes

uninhabitable Inhabit means to live in, reside in, occupy or populate some place – a so-called habitat. Inhabit may also refer to: * ''Inhabit'' (album), an album by Living Sacrifice * Inhabited (band), a rock group See also * Circumstellar habitable zo ...

. Due to renters' insurance existing mainly to protect against losses to the tenant's personal property and provide them with liability coverage but not to insure the actual dwelling, it is significantly less expensive than a homeowners' policy.The owner of the building is responsible for insuring the dwelling itself but bears no responsibility for the tenant's belongings.

General requirements

Many large and medium-sized rental properties include a requirement in their

lease A lease is a contractual arrangement calling for the user (referred to as the ''lessee'') to pay the owner (referred to as the ''lessor'') for the use of an asset. Property, buildings and vehicles are common assets that are leased. Industrial ...

that tenants hold renters' insurance. If the tenant damages the premises, the landlord and other tenants can recover against the perpetrator's insurance. It is important to know what type of damage your insurance covers. Essentially, there are three types of coverage available: loss of use, personal property, and personal liability.

Tracking renters' insurance

Multiple companies track renters' insurance in apartment complexes by requiring the tenant to purchase insurance, while maintaining a database of expiration dates, cancellations, and additional information for the property owner/manager to use to ensure coverage for all units. Among the companies that track renters insurance, there is some variation in methods. Some companies primarily track their own policies, while others will track a combination of their own issued policies and third-party policies submitted by tenants. By using additional interest tracking, management companies and property owners gain a more complete picture of the insurance profile of their properties by receiving notifications in the event there is a change, cancellation, or lapse to an insurance policy held by a tenant. A limited number of communities require that tenants list them on the policy as

additional insured In insurance policies, an additional insured is a person or organization who enjoys the benefits of being insured under an insurance policy, in addition to whoever originally purchased the insurance policy. The term generally applies within liabilit ...

. This actually makes it more difficult for a property owner or manager to recover from a tenant's liability policy because the additional insured is a party to the policy rather than a third party, which would be eligible for coverage.

References

{{Real estate Types of insurance