6 ADJUSTINGTODAY.COM Finally, a typical CP policy includes a limit for property of others under the insured’s care, custody or control. If an apartment complex owner stores property of its tenants as a service, this limit would pay for an insured loss to that property while in storage. Landlords and Tenants Understandably, residential tenants have no obligation to insure the landlord’s property, even the unit they occupy, for damage by property“perils”such as fire, windstorm and other hazards. For that reason, renters’policies typically restrict property coverage to tenants’personal property and personal liability. Sales of renters insurance lags far behind that of homeowners insurance, principally because there is no mortgage lender to require coverage, but also because most renters over the years have not owned valuable personal property. That is changing somewhat, as more high-income urban professionals and affluent elderly embrace renting, but many renters still do not have property insurance. A growing number of landlords are requiring tenants to have renters insurance as a condition of their lease. That’s mostly to ensure that tenants have liability coverage for bodily injury or property damage to others, including damage to the landlord’s property. In addition, however, renters insurance for tenants’ personal property helps landlords avoid disputes over damage to tenants’ possessions, even though it provides landlords with no direct benefit. Landlords and tenants have separate but related interests when a location cannot be occupied because it or a related property has been damaged. In that situation a landlord stands to lose rental income while units cannot be occupied, while tenants might incur added costs for an alternative dwelling. These separate exposures are insured separately. The landlord’s loss of rental revenue will be partially compensated by the business income coverage available under a CP policy; a limit for coverage must be selected, it is not provided automatically. … renters insurance for tenants’ personal property helps landlords avoid disputes over damage to tenants’ possessions, even though it provides landlords with no direct benefit.
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