Is it Advisable to Carry Insurance in a Rented House?
The issue of home insurance is frequently questioned when renting a house. Is it mandatory to have insurance in a rental house? Who pays the insurance, the owner or the tenant? What coverages should this insurance have (or should have)? In summary: as a tenant, do I have to insure my rented house? Whether as a landlord or as a tenant, it is advisable to have the home insured in order to protect the interests of both parties.
Next, we want to clarify if home insurance in rental houses is mandatory and who should pay for it. Purchasing a home insurance policy that covers the home is only mandatory when the home is mortgaged (All banks condition the granting of a real estate loan to the purchasing of a home insurance policy, but this requirement does not apply to tenants).
In principle, we could say that purchasing a home insurance policy for a rental house is the responsibility of the owner since by law the protection of the house is his responsibility.
However, there are different kinds of home insurance, where you can protect the contents, the dwelling and protect yourself for personal liability. The renter is not obligated to buy any of these coverages unless it is specified on the lease agreement, however, we strongly recommend having insurance on your home whether you live in it or rent it out.
Types of Homeowners Insurance Coverages
1. Dwelling insurance.
Dwelling insurance (which covers the structural and construction elements of the house), is always the obligation of the homeowner. The landlord cannot force the tenant to purchase this home insurance or to pay part of the insurance that is the responsibility of the homeowner. However, the owner can request it as a requirement to rent the house or apartment. In such a case, it can be added as a clause in the contract if agreed by both parties.
2. Contents Coverage Insurance.
Both parties may be interested in contracting content coverage insurance. The owner, for example, maybe interested if he owns the furniture of the rented house. In this case, the owner can contract this policy, but he must notify the insurance company that somebody else will be occupying the property.
It can also happen that the owner has no interest in insuring the property if there is not a mortgage attached to it, in this case, it is recommended that the tenant insures its contents (furniture and other items) of his property.
The homeowner’s insurance policy may cover personal responsibility and the dwelling but may not cover the contents of the property. Therefore, if there is a fire or flood, the structural damage that may be caused will be protected, but not the assets that are inside the house.
3. Personal Liability Insurance
Personal liability covers damages to third parties. The owner will have to purchase personal liability insurance to protect himself against the possible damages that the house may cause to third parties, these are damages that are not a direct consequence of the action of the person living in the house. For example, a broken pipe, a short circuit, etc. Having this type of coverage will protect the owner so he should not bear the expenses caused by these incidents.
It is advisable for the tenant to carry personal liability insurance to cover any damages caused to third parties. It is also recommended that the tenant purchases a personal liability policy that can cover any damage caused to the homeowner’s property.
Need Insurance Coverage?
Whether you are an owner or a tenant, at Rafail Insurance we recommend that you protect your property and your assets for any potential damages. If you are the owner of a rental home, you will have peace of mind for any damages that the tenant may cause or that may be caused to third parties.
If you are a tenant, it is advisable to protect the assets and valuables that are inside the home. Home insurance offers a wide range of possibilities that adapt to every need and pocket. If you have any questions, please contact us and we will recommend the best coverage option for you.
Contact our experienced insurance agents at 713-429-1790. Get in touch with us immediately so we can recommend the right coverage for your home or business.
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