When renting a house in the United States, tenants also need to purchase a "tenant's insurance" to protect the interests of their property from loss. There are different types of tenant insurance in the United States, and there is a big difference between the replacement cost and the actual value covered by the insurance. In addition to allowing tenants to smoothly replace furniture and items after accidents such as fire or theft, more importantly, this type of insurance comes with liability insurance.
Scope of liability
- Personal belongings of the tenant
The landlord's insurance insures the house, it does not insure the tenant's personal belongings, so if a fire or theft occurs, all tenants' losses will be covered under the tenant's insurance. Tenant insurance not only insures the things in your house, but also the things you carry with you. For example, a student brings a laptop to school to study, and the computer is stolen, so he can file an insurance claim.
- Tenant insurance contains a third-party liability insurance
For example, a guest is injured in your house, and then thinks it is your fault and decides to sue you. If his lawsuit is successful, all compensation will be covered in the tenant's insurance. Tenant insurance will also include some medical expenses for third parties.
- Tenant insurance provides extra living expenses
If an accident occurs in the house you rent and you cannot move in, you need to stay in a hotel or rent a more expensive house, go to a restaurant, etc. All these extra expenses will be paid by tenant insurance.
Insurance price
The premium for tenant insurance is not too high. For the basic insurance of 15,000 yuan for personal property and 100,000 yuan for accidental liability insurance, the annual premium is only about 150 yuan. If the accidental liability insurance is increased to 300,000 yuan, the annual premium is only about 170 yuan. Usually, tenants who are willing to buy tenant insurance are better tenants. In order to encourage tenants to buy tenant insurance, the landlord can use tricks on the rent. For example, if the tenant does not buy tenant insurance for a house that originally rents for 1,800 yuan, the rent will be increased to 1,850 yuan. The tenant can save money and protect his personal property by buying tenant insurance, so he will naturally be happy to buy tenant insurance.
Claims procedure
- The landlord must declare within 60 days after the loss of the house occurs, and fill in the loss certificate and submit it to the insurance company. The form should list in detail various loss items (items) and indicate their values. Each item in the form is listed as an item, but the prices of various items should be separated. It is best to report losses separately by room for the insurance company to review.
- All property losses must be discounted (except for those who purchase replacement cost insurance). The depreciation rate of each item is different. The annual depreciation rate of electrical appliances is 10%, hard furniture depreciates 5% per year, soft furniture depreciates 10% per year, tools depreciate 5% per year, clothes depreciate 5% per year, curtains depreciate 20% per year, cameras depreciate 5% per year, and antiques, silverware, and jewelry do not depreciate. The insured should try to provide the original receipt or a copy of the receipt as the basis for assessing the loss.
- If the insurance company has a bad business style and does not settle claims in accordance with regulations and contract provisions, the insured should write down the cause of the entire incident and keep a copy of the letter communicating with the insurance company so that he can find a lawyer to sue the insurance company.
Claim deadline
(1) Submit a "Proof of Loss" to the insurance company within 60 days of the incident;
(2) Select an appraiser within 20 days after the insurance company issues a valuation notice;
(3) If there is any objection to the insurance company's claim, a lawsuit must be filed within 12 months after the loss occurs;
(4) If the vacant building has been insured for less than 60 days when the loss occurs, the insurance company will not pay the claim.
Value to the landlord:
The value of tenant insurance to the landlord is mainly reflected in third-party liability insurance. Now let's assume that the landlord rents out the upper and lower floors of his two-story detached house to two families, and at the same time insures his rental house with a liability insurance of 2 million. If the landlord does not require tenant insurance, then during the tenant's rental process, the landlord will be exposed to at least two risks.
Risk 1: Due to the tenant's negligence, the rental house itself suffers huge losses for various reasons (fire, burst water pipes). Since the tenant does not have third-party liability insurance, the landlord cannot file a lawsuit against the tenant and obtain the corresponding third-party liability insurance compensation from the tenant's insurance company after winning the lawsuit.
Risk 2: Due to the tenant's negligence, the rental house itself suffered huge losses due to various reasons (fire, burst water pipes), and also affected the houses of the surrounding neighbors, causing huge losses to their property. Since the tenant does not have third-party liability insurance, the neighbors who suffered property losses are likely to file a lawsuit against the landlord and demand compensation from the landlord's own third-party liability insurance. If each tenant's family has tenant insurance, and each tenant insurance comes with two million, then the neighbors who suffered losses and the landlord can file a lawsuit against the two tenants together (provided that they are both responsible) and obtain compensation from each other's third-party liability insurance, and the upper limit of this compensation will be increased from the landlord's two million to the tenant's four million.
Value to tenants:
Tenant insurance protects tenants in two aspects:
- Global property protection. Ontario's auto insurance strictly defines the boundaries between the car and the owner's personal property. In the event of an accident, they will only provide insurance services for the car itself, but will not protect any personal assets carried by the owner in the car: such as mobile phones, computers, cash, credit cards, etc. This part of the protection must be provided by property insurance that covers the owner's personal property. Of course, this property insurance also includes tenant insurance.
At the same time, customers travel anywhere in the world, even if their property losses do not occur in their own rental houses, the insurance company will still accept their legitimate claims, because the customer's personal property is protected (of course, the insurance company will ask the customer for the purchase receipt of their lost property).
- Third-party liability insurance covering the world. Now suppose an Ontario customer travels to Mexico, but unfortunately, because of his negligence, the hotel where he lives suffers huge property losses, and the hotel is likely to sue the customer. At this time, the tenant insurance company will intervene to protect the legitimate rights and interests of the customer. If the court unfortunately finds that the customer is responsible, the winning hotel will obtain compensation from the third-party liability insurance, unless the compensation they claim exceeds the liability insurance limit of the policy. The insurance company will only bear the liability insurance limit specified in the policy, which is generally two million Canadian dollars. The remaining compensation will have to be borne by the customer himself.
