Renter's Insurance for Subletters: A Summer Real Estate Must


NEW YORK (MainStreet) – As thousands of college students exited cities like Boston, New York and Philly for the summer and have headed to apartments they are subleasing, the next step is to protect their belongings.

Ensuring that your clothing and expensive electronics are covered by renter's insurance is often overlooked by consumers who mistakenly believe that original renter or the management of the building covers any loss or theft.

Renters are 50% more likely to burglarized, but only 31% of tenants have renter's insurance, said Jim Hyatt, vice-president of personal lines at Arbella Insurance in Quincy, Mass.

Millennials and college students also tend to own expensive stuff including their tablets, smartphones, speakers, televisions and high-end clothing. Items that are left behind by the original renter won't be covered if they are damaged over the summer without renter's insurance.

The same goes for the new tenants - none of their personal belongings will be covered in the case of a fire or break-in.

Both the original renter and the subleaser need to get their own renter's insurance to cover their personal belongings, said Elaine Montgomery-Baisden, vice president of product management for Travelers in Hartford, Conn.

When you sublet, it is essential to have renter's insurance, especially if you are living in a neighborhood that you are unfamiliar with. Many people who sublet or rent in general mistakenly believe that should something happen to their possessions, the landlord is responsible for the insurance, Hyatt said.

"A good way to think about it is if you were able to lift up your apartment or house and shake it, the items that fall out would be covered under renter's insurance," she said.

Renter's insurance provides coverage in case a tenant who lives above you has a plumbing issue and the leak winds up in your apartment and damages furniture or flooring. If a fire started in one apartment and spread to surrounding apartments in the complex, it could damage or destroy everything that a renter owns. If the fire doesn't destroy the items, the water from the fire department may.

"Renters insurance can protect you from these and other types of losses including theft and help you replace all that you have lost," Hyatt said.

Many renter's insurance policies may cover the additional living expenses such as hotels and meals that consumers may incur if they forced out of their apartment by fire or other covered hazards, said Montgomery-Baisden.

If your name is on the lease and you decide to sublet a room, you should still have renters insurance to cover your belongings. Renter's insurance does not transfer from one person to another.

"Your renter's policy would be put in your name so it's important to remember that whoever you sublet to will not be covered under your policy, they need their own policy," Hyatt said.

Having your own policy when you sublet is a good idea, because you never know what type of a person you will be sharing an apartment with. The opportunity for theft can also increase in situations if the tenant leaves the door unlocked or makes copies of the key to give to a friend or someone else.

Purchasing renters insurance is relatively inexpensive and some companies like Arbella have deals where if you own or lease a car, you can add the renter's policy for as little at $3 per week, or the cost of a latte.

Renter's insurance can also cover you for things like identity theft, libel and slander, and it can pay some additional living expenses should you have to leave your apartment after a fire for instance, he said.

"We recommend that you talk to an independent insurance agent to get the right policy and to find out how to combine it with your car insurance to save even more," Hyatt said.

Make sure you complete an entire home inventory to ensure that the renter's policy covers all of your items in case of loss, said Montgomery-Baisden.

"A good policy has the right coverage for the renters needs," she said. "Even if you don't own a home, you still have a lot at stake. After all, your personal belongings, like clothes, furniture and electronics, have significant value."

--Written by Ellen Chang for MainStreet

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