Additional Insured Coverage is Often Required by Contracts
The term additional insured means a person or entity that is covered under another party’s insurance policy. Additional insureds are often included under general liability, commercial property or commercial auto policies.
Reason for Coverage
One of the most common reasons for providing additional insured coverage is a contractual requirement. When one business performs work for another, the hiring company often demands coverage as an additional insured under the other party’s general liability policy. The obligation to provide coverage is stipulated in a written contract signed by both parties.
A second reason for providing additional insured coverage is a government statute. A business may be required to cover a government agency as an additional insured as a condition of obtaining a permit to erect a sign over a public sidewalk. A business may also provide additional insured coverage voluntarily. For instance, a church insures its members under its liability policy for activities they perform on the organization's behalf.
To qualify for additional insured coverage, a person or entity must meet certain requirements. These vary by the type of coverage.
General Liability Coverage
To be included as an additional insured under a liability policy, a person or entity must have a business relationship with the policyholder (named insured). Here are some common business relationships that create a need for additional insured coverage:
A second requirement for additional insured coverage is a risk of lawsuits as a result of the policyholder’s negligence. For example, suppose you lease office space from a commercial landlord. If you fail to keep the entrance to your premises tidy, a customer could sustain trip and fall injury while entering or exiting your office space. The injured party might sue you for bodily injury. He might also sue your landlord, contending that the building owner knew your premises was cluttered but failed to require you to clean it up.
Landlords know that they are viewed as “deep pockets” by potential claimants. Thus, your lease will probably require you to include your landlord as an additional insured under your general liability policy.
Auto Liability Coverage
The requirements for additional insured under auto liability insurance are the same as those for general liability. The party seeking coverage must have a business relationship with the named insured (policyholder) and face a risk of third-party lawsuits as a result of negligence committed by the named insured.
For example, Busy Builders, a general contractor, hires Luxury Landscaping to plant new gardens at a medical complex Busy is refurbishing. Busy’s owners know that under certain circumstances, Busy could be held vicariously liable for injuries sustained by a third party in an auto accident caused by a Luxury Landscaping employee. Busy could be responsible if, say, the accident occurred while a landscaping employee was running an errand on Paul’s behalf. To protect the general contractor, Busy Builders’ owners ensure that Luxury Landscaping has purchased auto liability coverage under a business auto policy.
If Busy Builders is sued by a third party for injuries sustained in an auto accident caused by a Luxury Landscaping employee, Busy should be automatically covered under the landscaper’s auto policy. No endorsement is needed. The omnibus clause in the policy covers as an insured anyone who may be vicariously liable for the conduct of the named insured.
To qualify as an insured under another party’s property policy, a person or entity must have an insurable interest in property covered by the policy. For example, suppose you operate a restaurant in a building you lease from Red-Letter Realty. The lease requires you to insure the building under a commercial property policy that includes Red-Letter Realty (the owner) as an additional insured.
Scope of Coverage
The coverage afforded to additional insureds is usually limited in some manner. The applicable limitations may be described in an endorsement or in the policy itself.
With regard to liability coverage, an additional insured is usually covered only for claims that arise out of the work or operations the named insured is performing on the additional insured's behalf. This means that a general contractor is an insured under a subcontractor's policy only for claims that arise from work performed by the subcontractor on the the general contractor's behalf. Likewise, a landlord is generally covered under a tenant's liability policy only for claims that arise from the tenant's use of the leased premises.
Under a property policy, an additional insured is covered only for its insurable interest in a specific piece of property. Red-Letter Realty (in the previous example) is covered under your property policy for its ownership interest in the building. It is not an insured with regard to any other property covered by the policy, such as contents that belong to you.
Why does my landlord want to be listed as an additional insured?
Mar 7, 2018 12:07:44 PM / by Meghan Stickney
Do you know why your landlord keeps asking to be added as an additional insured on your insurance policy?
An additional insured is someone who is entitled to coverage under your policy as a result of claims arising out of your use of your premises or operations at your business premise. This means that instead of having to collect under their own policy, an additional insured can first collect under your policy, leaving their policy as a backup.
Landlords will generally want to be added as an additional insured on your policy so that any claims that arise out of your operations and/or general use of your premises, especially liability claims, will be covered under your policy first. In the event of a lawsuit, many parties can be named as defendants, including the landlord.
This can end up becoming a very expensive and time consuming process. This issue can be mitigated by adding your landlord as an additional insured on your policy, since they will be able to use your insurance company’s lawyer, rather than have their insurance company hire a separate lawyer to defend them. More importantly as they are only an additional insured, your policy will only cover them if a claim is made against your business or its operations.
Front Row’s Workplace insurance program offers clients an easy way to add additional insureds to their policy. This is automatically included when you buy a Workplace Insurance policy.
Liability and property insurance protects policyholders from such diverse acts as a fire in a warehouse or a visitor slipping on a construction site. However, sometimes other parties also need the protection of this insurance policy.
An additional insured is a person or company other than the named insured listed on an insurance policy, who is protected under the terms of the policy. For example, a mortgage company might be an additional insured on a homeowners policy, and a homeowner having a home constructed could be an additional insured on the construction company’s policy.
Most auto liability policies automatically provide additional insured status to anyone driving a vehicle with the owner’s permission. The driver is thus covered under the vehicle’s auto insurance.
Additional Named Insured
A person listed as the named insured on an insurance policy is the owner of that policy. An additional insured party does not own the policy but is covered by the policy. Parties also can be listed as additional named insureds, which means they can be held financially responsible for the policy if the first named insured doesn’t pay the premiums.
Certificate Holder Status
Anyone listed as an additional insured on an insurance policy should request Certificate Holder Status. Otherwise, the insurance company will not inform the additional insured if the policy is canceled.
Additional Insured vs. Loss Payee
People or companies can be listed as additional insureds on liability or property policies in which they have a financial interest or a liability risk. A loss payee, on the other hand, typically does not have a liability risk but does have a financial interest. An example of a loss payee is a lien holder on equipment.
- University of Alaska System Office of Risk Services
- Insurance 4 USA
Stacey Schifferdecker has worked as a professional writer since 1989. She holds a Master of Arts degree in English from Oklahoma State University. Schifferdecker has written and edited user guides, newsletters, brochures, curriculum, proposals, web copy, and ebooks.
An interested party on a renters insurance policy is someone who is notified by your renters insurance provider that you have coverage, and they will be notified if you cancel or make a change to your policy. In most cases, an interested party will be your landlord in order to confirm that you have renters insurance — a common requirement for renting an apartment or house.
An interested party is also sometimes called an “additional interested” or “third-party designee.” Being named as an interested party doesn’t allow your landlord to make a claim on or make changes to your renters insurance — it only entitles them to know the status of your policy.
- Why do landlords require you to list them as interested parties on renters insurance?
- How do you add a renters insurance interested party?
- The difference between additional interest and additional insured
Why do landlords require you to list them as interested parties on renters insurance?
It’s increasingly common for landlords to require tenants to purchase renters insurance , as it limits the financial liability of both the landlord and the tenant in case an accident occurs. If you have to buy renters insurance as a condition of your lease, noting your landlord as an interested party will provide them with proof that you’ve purchased a sufficient amount of renters insurance coverage.
How do you add a renters insurance interested party?
Noting your landlord as an interested party on your renters insurance policy is straightforward, though the process may differ slightly by insurance company. Most renters insurance companies, including State Farm, Geico and Lemonade, allow you to add an interested party online. You’ll just need to provide your landlord’s contact information, including their name, address and email. Your landlord will get a description of your renters policy via email or regular mail shortly after you add them as an interested party.
Adding a renters insurance interested party is typically free. If you find a renters insurance company that charges more than a dollar or two per month to add an interested party, consider looking elsewhere for a better deal on renters insurance , as even a few dollars per month will add up to a significant increase in the cost of insurance.
The difference between additional interest and additional insured
“Additional interested” and “additional insured” are two similar-sounding terms related to renters insurance that have very different meanings. “Additional interested” is simply another name for an interested party — someone who wants to know whether you have renters insurance. It’s common to add your landlord as an additional interest.
“Additional insured,” on the other hand, is another person covered by your policy, and adding your landlord as an additional insured is a very bad idea — for you, your landlord and your insurance company. In fact, most renters insurance companies won’t let you list your landlord as an additional insured at all.
If you add someone to your policy as an additional insured, it means they are protected by your policy’s liability coverage . You might commonly add your spouse or your roommate as an additional insured so that you’re all protected under the same policy. If you add your roommate to your policy and a visitor is injured by your roommate’s dog, the liability policy would cover any damages.
However, adding your landlord as an additional insured makes it impossible for either of you to make a claim against one another’s liability policies for damages.
If your landlord requests you to add them as an “additional insured” to your renters policy, they likely mean “additional interested.” Clarify what they mean before adding them as an additional insured under your renters insurance.
Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.
How do I add a interested party to renters insurance lemonade?
It takes approximately 28 seconds to add an insured party:
- Open your Lemonade app, and choose ‘My Insurance’ from the Settings menu.
- Tap ‘Add-ons’ on the next screen and choose ‘Interested Party. ‘
- Fill in your landlord’s name, address and email.
What is interested party on renters insurance?
An interested party on a renters insurance policy is a third party, typically your landlord or property management company, that gets up-to-date info any time you change or cancel your policy.
What is the difference between interested party and additional insured?
An additional interest has a vested “interest” in the item or property being insured but has no actual ownership of it. … An additional insured party often holds partial ownership of what’s being insured. It is important that anyone with partial ownership of the insured interest is listed on your policy.
Why does my landlord want to be additional insured?
Landlords will generally want to be added as an additional insured on your policy so that any claims that arise out of your operations and/or general use of your premises, especially liability claims, will be covered under your policy first. … This is automatically included when you buy a Workplace Insurance policy.
How do I add a interested party renters insurance to Liberty Mutual?
You can add additional interest or interested party or party of interest after you purchase your renters insurance policy. You simply contact your insurance company and say that you want to add an additional interest.
How much does lemonade renters insurance cost?
Lemonade advertises its insurance policies at highly competitive rates, starting at $5 a month for renters insurance and $25 a month for homeowners insurance.14 мая 2020 г.
Which is the best renters insurance?
The best renters insurance companies for 2020
- Best for online tools: Allstate.
- Best for extended coverages: Nationwide.
- Best for discounts: Liberty Mutual.
- Best for competitive rates: American Family.
- Best renters insurance for policy management: State Farm.
- Best for customer support: MetLife.
- Best renters insurance for military members and families: USAA.
Who should be listed on renters insurance?
Siblings, Partners, Students, And College Roommates
The two most common are when a policyholder’s roommate is a sibling or a girlfriend or boyfriend they live with. If a policyholder is the legal guardian of a sibling they live with, then the policyholder should list the sibling on their renters insurance policy.
What are interested parties?
An interested party can be a stakeholder, person or organization that can affect, be affected by, or perceive itself to be affected by a decision or activity. Clause 4.2 of ISO 9001:2015 addresses the requirements of interested parties.
Why do you need an additional insured endorsement?
An additional insured endorsement is an amendment to one party’s insurance policy which adds another party (also called the “additional insured”) as an insured under the policy. Like contractual indemnity clauses, additional insured endorsements can serve to protect the recipient from claims made against the recipient.
How do you identify an interested party?
process for mapping interested parties
- Identify relevant interested parties. …
- Determine their needs and expectations. …
- Rank them in terms of power and interest: Consider their strength of interest and level of influence over your decisions and actions. …
- Set objectives and priorities.
What does it mean additional insured?
An additional insured extends liability insurance coverage beyond the named insured to include other individuals or groups. An additional insured endorsement protects the additional insured under the named insurer’s policy allowing them to file a claim if sued.
Does renters insurance cover damage to landlords property?
According to Nolo, renters insurance can cover: loss due to theft, negligent destruction of the tenant or landlord’s property, liability for injuries, and.
Why should a tenant purchase renters insurance?
Without renters insurance, the tenant may have to bear the financial burden of a loss to their personal property. A renters policy might: Compensate you if your belongings, like a bike, a laptop, or a television, are lost, stolen, or damaged.
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When you’ve found an apartment that meets your needs and budget, there’s more to think about than making your security deposit and plans to move in. Your landlord may require you to have a renters insurance policy and might even require that they be listed as an interested party on your policy.
What is an interested party on a renters insurance policy?
In the context of renters insurance, an interested party is an individual or entity who is included for notification on the policy’s status. This designation is also sometimes called an “additional interested,” “party of interest,” or “third-party designee.”
If your landlord required you to have renters insurance and list them as an interested party on the policy, this allows the landlord to be notified if your policy is dropped, modified, or allowed to lapse.
Why does your landlord require you to list them as an interested party?
Your landlord likely requires you to list them as an interested party so that they can have proof that you’re covered by a renters insurance policy and receive notification if anything changes.
Your landlord may want to be assured that their risk and your risk is minimized with a renters insurance policy. A renters insurance policy covers your personal property and may also provide you with liability protection and other things including coverage for additional living expenses. However, that insurance coverage only applies as long as the policy remains in good standing.
If a renter provides proof of renters insurance at the lease signing, and then six months later the policy is canceled, the landlord might never know that the policy is no longer in effect, unless they are listed as an interested party on your policy.
Dropping renters insurance is a big gamble. If your lease requires you to carry coverage (and many now do) allowing the policy to lapse or canceling it violates the terms of your lease. If your landlord finds out, you could be in significant trouble, and that’s without any accident involved.
If you cancel your renters insurance policy and there is an accident that you are responsible for, you would likely be responsible for paying for all of the repairs out of pocket.
So, your landlord may be asking to be listed as an interested party on your renters policy for the same reason they are requiring you to get coverage in the first place. It’s likely to protect themselves in the event of an accident that causes property damage or liability issues. They want to be sure you have renters insurance and keep the policy active.
Additional interested vs. additional insured
Insurance terms are very specific and it’s important to pay close attention to what type of coverage is requested. “Additional interested” is very different from “additional insured,” even though both terms sound similar.
An “additional insured” would be a person covered by the provisions of your renters insurance policy. This could be a spouse who lives with you in the rental. In most cases, it makes sense even for each roommate to have their own renters policy. Having an “additional insured” on your renters insurance policy only makes sense if all of the property being covered is or will soon be jointly owned, such as an engaged or married couple.
If your landlord asks to be listed as an “additional insured,” they most likely mean “additional interested.” Be sure to ask your landlord for clarification and make certain you know what is being requested of you. Having your landlord listed on your policy as an additional insured doesn’t really make sense, because the landlord doesn’t share ownership of your property.
How do you add your landlord as an interested party to your policy?
Adding your landlord as an additional interested party on your renters insurance policy should be a fairly straightforward process. It should be as simple as letting your agent know, or adding your landlord’s name and address online.
Not all insurance companies have this as an option, however. If your insurance company isn’t able to add your landlord as an additional interested party, find out what they will do (such as provide proof of insurance). Talk to your landlord to see if that’s sufficient.
If you’re looking for renters insurance, you can visit Clearsurance’s renters insurance rankings page to see a list of the best companies in your area, according to consumers. Be sure to get renters insurance quotes from multiple companies so you can compare the cost of each to find the best deal.
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The content on this site is offered only as a public service to the web community and does not constitute solicitation or provision of legal advice. This site should not be used as a substitute for obtaining legal advice from an insurance company or an attorney licensed or authorized to practice in your jurisdiction. You should always consult a suitably qualified attorney regarding any specific legal problem or matter. The comments and opinions expressed on this site are of the individual author and may not reflect the opinions of the insurance company or any individual attorney.
Most renters insurance companies, including State Farm, Geico and Lemonade, allow you to add an interested party online. You’ll just need to provide your landlord’s contact information, including their name, address and email.28 mai 2021
- 1 What type of insurance is landlord insurance?
- 2 How much more expensive is landlord insurance?
- 3 What is landlord insurance and do I need it?
- 4 Which one of the following is not covered by renter’s insurance?
- 5 What is a good amount of renters insurance?
- 6 Is it worth getting landlord insurance?
- 7 Why is landlord insurance more expensive?
- 8 Do you need home insurance and landlord insurance?
- 9 Does landlord insurance cover loss of rent?
- 10 Who pays for building insurance landlord or tenant?
- 11 Is it worth to rent a house?
- 13 What is not covered by homeowners insurance?
What type of insurance is landlord insurance?
Landlord insurance is a policy for someone who rents out a home they own. This type of insurance typically includes two different types of coverage: property and liability protection. Both coverages are intended to help protect you, the landlord, from financial losses.
How much more expensive is landlord insurance?
Yes. According to the Insurance Information Institute, a landlord insurance policy costs about 25% more than a homeowners insurance policy for the same property. The primary reasons for the difference in cost revolve around who is occupying the home.
What is landlord insurance and do I need it?
Basically, it covers you for the common risks associated with renting your property out. If you don’t have landlord insurance, you’ll be liable for repair costs to your property should your tenants (or their guests) cause damage. … You may be relying on their rent for income or using it to cover your borrowing expenses.
Which one of the following is not covered by renter’s insurance?
Some of the most common perils not covered by renters insurance include floods and earthquakes. When damage or theft of your personal property is covered by your renters insurance, you can make a claim for reimbursement up to your policy limits.14 jui. 2021
What is a good amount of renters insurance?
The typical renters insurance policy offers $100,000 in liability coverage. For renters, this amount is often sufficient. However, if you entertain company frequently at your home or if your assets exceed that amount, you should consider an amount of insurance equal to at least the total value of your assets.
Is it worth getting landlord insurance?
If you rent out a property, it’s a good idea to have landlord insurance. It covers lots of the same things that your regular home insurance does but it goes further, covering the risks that come with a rental business too whether you rent out one house or ten flats.2 aout. 2020
Why is landlord insurance more expensive?
Landlord insurance is more expensive than homeowners because rental properties are more likely to have a higher number of severe claims than primary residences. This increased risk makes landlord insurance more expensive, but both the landlord and the tenants may be responsible for any damages.
Do you need home insurance and landlord insurance?
Landlord insurance is a type of homeowner insurance that’s designed for rental properties, so you shouldn’t need to have landlord insurance and separate homeowner insurance. Your landlord insurance policy can cover your buildings and contents in case of damage by something like fire or flood.
Does landlord insurance cover loss of rent?
Landlord insurance is a wise investment for owners who lease their property. It generally provides protection for the main risks landlords face including: … Contents cover for the landlord’s belongings. Loss of rent resulting from an event the insurer has agreed to cover.
Who pays for building insurance landlord or tenant?
It’s your landlord’s responsibility to organise buildings insurance. There’s no legal requirement for buildings insurance, although it’s a good idea for landlords to have it in place to protect not only their tenants but also their investment.14 jan. 2020
Is it worth to rent a house?
Why renting is awesome The financial benefits to home ownership are often overstated. But renting has two big non-financial benefits that you shouldn’t overlook. Most importantly, renting gives you flexibility. … Also worth restating is the freedom renting gives you from monotonous and expensive maintenance.
What type of insurance do I need for my investment property?
A comprehensive building and contents insurance policy will ensure you are covered for any damage to the property as well as your furniture. You can add optional extras to cover you against loss of rental income or any legal expenses you may incur.9 nov. 2020
What is not covered by homeowners insurance?
Termites and insect damage, bird or rodent damage, rust, rot, mold, and general wear and tear are not covered. Damage caused by smog or smoke from industrial or agricultural operations is also not covered. If something is poorly made or has a hidden defect, this is generally excluded and won’t be covered.
Whether you’re moving into a new apartment and your landlord is requiring you to get renters insurance or you’re relocating and want to make sure your belongings are safe and secure, a renters insurance policy can help. Similar to homeowners insurance, renters insurance protects your personal belongings if they’re damaged by a covered peril, such as a fire or windstorm.
Because there are a variety of renters insurance companies to choose from, the Home Media reviews team researched multiple insurers and compared coverage, pricing and other benefits to help you find a renters insurance policy. Keep reading to learn how to purchase renters insurance.
If you’re ready to purchase a renters insurance policy, enter your zip code into this online tool and compare quotes from multiple renters insurance companies near you.
What does renters insurance cover?
Here’s what a typical renters insurance policy covers:
- Liability: Personal liability coverage protects you if someone gets injured on your property and it’s your fault. It can help pay for court judgements and other legal fees, as well as medical expenses that you can’t cover.
- Personal property: Renters insurance companies also provide personal property coverage, or personal possessions coverage. With this insurance coverage, you’ll receive compensation for your belongings should any damage, theft or vandalism affect them. This coverage also protects against normal perils that may damage your possessions, such as weather-related damage, fires, plumbing issues and electrical issues.
- Additional living expenses: If a covered peril makes your apartment, condo or rental uninhabitable, your insurance company will cover any additional living expenses, such as hotel fees and meals, that you and your family might incur while your current residence is being repaired or reconstructed.
In general, the following events are covered under renters insurance:
- Windstorms and hail
- Water leaks
- Damage from snow, ice or sleet
- Damage from steam-heating or water-heating appliances
- Freezing of plumbing, heating and air conditioning
- Short circuit damage
- Theft and robbery
- Damage by a vehicle that is not your own
- Falling objects
How to get renters insurance
When you’re ready to buy a renters insurance policy, follow these steps:
Estimate the value of your personal property
Take inventory of your belongings and estimate their total value. Go room to room in your home and take pictures of each item you would want cash value for if anything happened to your home. In addition to taking photos of these items, record any serial numbers that might be helpful to identify the item after a covered peril.
Additionally, keep a list of the cost of each item. If you don’t know the cost of an item, look it up online or look up the cost of similar items. You’ll also want to include any receipts or appraisals you have for these items. Consider using an online home inventory tool or an inventory smartphone application to store this information.
Check with your landlord
There are three main reasons you’ll want to check with your landlord before gathering and comparing renters insurance quotes:
- Most landlords will require you to purchase a policy with certain coverage limits. If they don’t, decide how much coverage to buy by comparing an insurance company’s offerings to your personal inventory. You may want to check with an insurance agent about any discounts they’re offering and have a discussion about their coverage options.
- Your landlord’s insurance policy might cover certain items that you were considering adding to your policy for extra protection, so checking with them before adding any additional coverage can prevent you from spending money on unnecessary coverage.
- Landlords and leasing offices often have partnerships with renters insurance companies in the area and can offer you a discount on your policy.
Understand what’s included in a policy
Review the terms and conditions of the policy you’re considering so you understand your coverage and plan pricing and aren’t surprised by any coverage limits or additional fees. This is also a good moment to determine how to file a claim with the company.
Gather quotes and compare policies
After meeting with your landlord, gather quotes from three to five renters insurance providers to compare pricing and coverage. Most quotes will include information about the coverage included in the policy you’ve selected. If you want to compare a variety of companies in your area, take advantage of this free and easy online quote tool.
Though your landlord might be able to provide you and your family protection when it comes to property damage, you’re responsible for covering your personal belongings. Renters insurance can protect your belongings if they’re damaged by a covered peril, such as fire or lightning. If you want to compare quotes from other renters insurance providers in your area, use this online quote tool.
Frequently asked questions
Your landlord may require you to get renters insurance. Even if it’s not required, investing in a renters insurance policy can protect your personal belongings if they’re damaged by a covered peril, such as fire or theft.
While renters insurance protects you from a variety of perils and the damage caused by them, it doesn’t protect your belongings from damage caused by natural disasters, such as earthquakes, and pest-related problems, such as termite infestations.
While most standard renters insurance policies don’t cover identity theft, some providers will offer identity theft coverage as an endorsement, or add-on. This additional coverage will pay for expenses related to recovering your identity, such as the fees for sending letters to credit bureaus or getting documents notarized.
Your landlord or leasing office may ask you for proof of insurance before you sign a lease. To do this, simply send your landlord or leasing office a copy of your policy. You can also speak with your insurance company and add your landlord as an interested party to your policy. This allows you to have additional proof that you own a renters insurance policy.
Though renters insurance prices vary according to what company you use and what policy you get, you can expect to pay around $120 to $190 per year for renters insurance.
Through in-depth research of the industry, we determined the following factors and weights to rate each company by:
- Overall cost: 15/100
- Add-ons and discount options: 20/100
- Standard coverage: 17.5/100
- State availability: 5/100
- Support availability: 20/100
- Connectivity: 12.5/100
- Authority: 10/100
We used these rating factors to determine the best renters insurance companies to help with your decision when looking at policies. We routinely monitor and update data on a regular basis to ensure the reviews reflect the most up-to-date information and advice.
Renters insurance isn’t required by state law. Most renters only get insurance if required by their landlord. If your landlord does ask you to get insurance, you’ll likely be asked to provide proof of your policy.
What is proof of renters insurance?
If your landlord or property management company requires renters insurance as part of the lease, there are several ways to prove you have insurance. Most renters insurance companies have online applications that give you your insurance policy electronically within moments.
You can: (1) provide the declaration page of your policy to your landlord or property management, or (2) you can include your landlord as an “interested party” on your renters insurance. Some landlords will simply ask for your renters insurance company name and your policy number.
If your landlord requires renters insurance, most often they also request to be listed on your renters insurance policy as an “interested party.” An interested party is also referred to as an “additional interested” or “third-party designee.”
The interested party cannot make changes to your renters insurance. However, they are informed if you make changes to your policy or cancel it. When completing your renters insurance application, most companies will ask if you want to list an interested party at no cost.
You need the landlord or property management’s address and contact information. If you list your landlord as an “interested party” on your renters insurance application, the insurance company will notify them.
How much renters insurance can landlords require?
Your landlord has insurance that covers the building and structure, but your personal belongings inside the rental unit are your responsibility.
Remember that renters insurance is not required by law. In Oklahoma, for instance, landlords cannot require renters to purchase renters insurance because under the “Sutton Rule” tenants are considered co-insured under the landlords policy. In Oregon, the law limits the amount of renters insurance a landlord can require.
There are two main parts of coverage to a renters insurance policy: personal property coverage and personal liability coverage. It also provides “loss of use” coverage if your rental becomes unlivable due to damage.
Typically, renters insurance policies cover up to a certain amount, usually around $20,000 or $30,000 worth of coverage. Determining the value of your personal belongings will help you decide how much coverage to get.
How to get renters insurance
The average cost of renters insurance is around $15 a month, or $180 yearly, but varies by state. Some factors that go into determining your premium are the amount of coverage you want: where you live, if you own a pet, and your credit score. If you already have auto insurance, you may get discounts from your provider for bundling your renters and auto insurance .
If you rent in disaster-prone areas — flood zones, hurricanes, tornadoes, wildfires, mudslides, and earthquakes — will have increased premiums because they’re not included in basic coverage and will need to be add-on policies, known as a rider.
To be sure that you’re getting the best price for your renters insurance coverage, you’ll want to shop online and get quotes from several different insurers. Compare the quotes, and look for the most coverage types and limits. Then, look for the lowest premiums that fit your budget.
When renting property, it’s a good idea to carry renters insurance. A tenant might even be required to do so by the landlord, who might insist that the tenant add her name as an “additional interest” or “third-party designee” on the policy. This ensures that the insurer alerts the third party, in this case the property owner, if the policy cancels or doesn’t renew.
Property owners purchase insurance on their rental property to protect the property against disasters, such as fire. The policy typically covers structural damage or any of the owner’s property in the dwelling, but it does not insure the renter’s personal belongings. Renters insurance protects the renter’s possessions, covers the tenant in the event of lawsuits by guests or visitors injured in the home and provides additional living expenses if the renter is displaced after a disaster makes the house uninhabitable.
Landlords require tenants to buy renters insurance for several reasons. First, it decreases the chance the tenant will sue the landlord if his possessions are damaged as a result of an event covered by the owner’s policy. The renters policy can also pay for the removal of the renter’s damaged property left behind after such a disaster. In addition, liability coverage can protect the landlord if someone is injured or has property damaged on the premises, especially if the incident results from the negligence or actions of the tenant. If it results from the landlord’s negligence, the owner’s policy covers the damages or lawsuit costs.
Adding a Third Party Designee
A landlord named as an “additional interest” can monitor the state of the policy and make sure it stays in force. The landlord receives all relevant correspondence pertaining to the policy, as the insurer will notify the third party of any changes in the policy. This way the landlord receives notice if the renter provides proof of insurance at the beginning of the lease but then cancels or fails to renew the policy.
Paying for the Policy
Both the renter and the landlord benefit from the protections of renters insurance — and for a relatively inexpensive price. Typically, a renters insurance policy costs less than $20 a month, depending on the value of the renter’s possessions. As of 2019, renters in North Dakota pay the lowest monthly premium ($9.58), and renters in Mississippi pay the highest monthly premium ($20.33). Most major insurers add an additional interest or third-party designee to the policy for no additional cost.
- Effective Coverage: Additional Interest Vs. Additional Insured
- Allstate: What is Renters Insurance?
- Effective Coverage: What Is A Renters Insurance Interested Party?
- Value Penguin: Average Cost of Renters Insurance (2019)
- Insurance Information Institute. “Your Renters Insurance Guide.” Accessed May 11, 2020.
- State Farm. “How Can Renters Insurance Protect Both Landlord and Renter?” Accessed May 11, 2020.
- Travelers. “Renters Liability Coverage.” Accessed May 11, 2020.
- USA.gov. “Property Insurance.” Accessed May 12, 2020.
- National Association of Insurance Commissioners. “NAIC Releases Report on Homeowners Insurance.” Accessed May 12, 2020.
- Insurance Information Institute. “Renters Insurance.” Accessed May 12, 2020.
Chris Brantley began writing professionally for a financial analysis firm in 1997. From 2000 to 2004, he worked as a financial advisor, specializing in retirement planning and earned his Series 7, Series 66 and insurance licenses. Brantley started his full-time writing career in 2012 and has written for a variety of financial websites, including insurance, real estate, loan and investment sites. He holds a Bachelor of Arts in English from the University of Georgia.