Many tenants are unaware about the importance of getting tenant insurance. They though that all the damage costs will be bear by the landlord. The landlord will only buy insurance to protect the property structure. Normally, the landlord won’t include insurance coverage for the belongings of the tenants. Therefore, it is the responsibility of the tenants to get tenant insurance in case an unfortunate event happens.

In tenant insurance, there are two cost replacement options you can choose. The actual cash value will pay out the actual market value of the damaged properties. The replacement cost coverage will pay a lump sum compensation for the tenant, regardless of the market value of the properties. The replacement cost tenant insurance is more expensive than the actual cash value tenant insurance. This is because the market value of the properties will drop as time passed by, especially electrical appliances.

Besides, the tenant insurance also offers coverage against litigation. If a visitor was injured because of an obstacle at the house, the insurer will pay for the medical fees and legal cost. If the house was burned or destroyed through a natural disaster, the tenant insurance will offer a new home that is priced almost the same for the tenant so that he has a place to stay temporarily. The allowance will be about 40% of the value of the policy. Most insurance companies will let the tenant stay in the new temporary house for up to 12 months until he is able to find a new house to rent.