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Tenant insurance explained
When you rent your home (instead of owning it), you can buy tenant insurance, which is a type of insurance policy that’s meant to cover tenants’ possessions and provide protection from legal liability.
Tenant insurance is also known as renters insurance. The term “tenant insurance” is more common in Canada and the UK, although “renters insurance” is used much more often in America, which is why we use it elsewhere on our site, such as in our introductory article on what renters insurance is.
What tenant insurance covers
Tenant insurance or renters insurance covers your personal property and your personal and medical liability. It also provides guest medical coverage, as well as loss-of-use coverage if something goes wrong in your home and you have to temporarily move out.
What that means
- Personal property: If your property is damaged by a covered peril, such as a fire or a short circuit in one of your appliances, your insurer will send you money to replace the lost item. (Note that the amount of money you will receive depends on whether you choose a renters insurance replacement cost policy or actual cash value policy. Also, you’ll still have to pay your renters insurance deductible, a small portion of the cost that you’re responsible for yourself.)
- Personal liability: If someone gets hurt in your apartment, or if you accidentally damage their property, you might have to pay their medical bills or reimburse them for the damage. Your tenant insurance policy will cover these expenses, such as injuries from dog bites, as well as your attorney fees if they take you to court.
- Guest medical coverage: If a guest in your home suffers a small accident — if they trip and sprain their ankle, for example, or get food poisoning — your tenants insurance will pay for their hospital bill, even if they don’t try to hold you legally responsible.
- Loss-of-use coverage: If a covered peril damages your home and you have to move out while the damage being repaired, your policy will also compensate you for your additional living expenses (e.g. grocery bills and hotel fees) until you can move back in.
What doesn’t tenant insurance cover?
Tenant insurance doesn’t cover your car or any other type of motor vehicle you own. To insure your car, you need auto insurance.
It also doesn’t cover the building you live in, because that’s your landlord’s responsibility. However, if you inadvertently damage your building and your landlord seeks compensation from you, your policy might cover your liability.
Do all tenants need renters insurance?
All tenants need renters insurance, in the sense that getting it is almost always a good idea. It’s extremely cheap; renters insurance costs just around $15 per month, and has the potential to save you tens of thousands of dollars if there’s a disaster in your apartment, like a fire that destroys most of your possessions.
For this reason, although the law doesn’t require renters insurance, many individual landlords do. It’s legal for them to make buying insurance mandatory as one of the terms of your lease.
Note that some insurers require an additional fee or a down payment. To avoid a renters insurance down payment, you can sometimes pay upfront for the entire year, or simply choose an insurer that never charges extra fees.
What is the difference between renters insurance and tenant insurance?
There is no difference between renters insurance and tenant insurance. They’re just different terms for the same type of policy.
Tenant liability insurance vs. renters insurance
There’s also no difference between tenant liability insurance and renters insurance. “Tenant liability insurance” is just another way of referring to the personal and medical liability coverage that all renters insurance policies offer.
Other names for tenant insurance
In addition to tenant insurance, there are several other ways of referring to renters insurance:
- HO4 insurance: This is an insurance industry term. In insurance jargon, renters insurance policies are called HO4 forms.
- Contents insurance: Renters insurance is sometimes called contents insurance because it covers the contents of your home, but not your home (i.e. the building) itself.
- Rental insurance: Renters insurance is sometimes incorrectly referred to as rental insurance. (There is a type of insurance called short-term rental insurance, but it’s a separate kind of policy that’s meant for landlords, not renters.)
- Rent insurance: Similarly, this is an incorrect term. The correct terms are “renters insurance” and “tenants insurance.”
- What is guest medical coverage in renters insurance?
- What is a sub-limit in renters insurance?
- Does renters insurance cover home-based businesses?
- Does renters insurance cover gold or silver bullion?
- What does "dependent in the care of" mean in renters insurance?
- Does State Farm renters insurance cover hotel stays?