Is renters liability insurance mandatory in Georgia, or is getting the coverage simply the financially responsible thing to do? It depends on your situation, but start with a basic definition of what tenant liability renters insurance is all about.
What Is Renters Liability Insurance?
It’s one important component of a standard renters insurance policy. That means it’s just one benefit of many you get when you buy renters insurance for your home that is a rental property, whether a new apartment in Georgia, a house, a duplex, or a houseboat, for that matter.
Tenants carry rental policies to cover their possessions against fire, smoke, internal flooding, burglary, vandalism, and any of the countless other ways your things might be lost, damaged, or destroyed.
It’s not only the items in the rental properties that are covered, either. Most standard renters insurance policies also cover possessions you might have left in your car or even in an off-site self-storage facility.
Some landlords require renters insurance with tenant liability protection. That’s because if your finances are seriously threatened, they might not get their rent paid on time.
Your renters insurance policy will likely also cover the rent of temporary housing if you’re displaced from your Georgia rental property by fire or other event that closes it down for a period of time.
The point is, you get plenty of advantages for the low rates you’ll pay for your policy. But it’s your renters insurance liability coverage benefit that’s highlighted here.
What Does Renters Liability Insurance Cover?
Your renters liability coverage protects your finances when you’re held liable, or legally responsible, for injuries and damages caused to others.
For instance, your kids play with matches, and the fire causes flame or smoke damage to other units in your apartment building. Or you throw a party and one of your guests gets into a fight with another and causes injuries. You’re held responsible for inviting the drunken brawler or letting him drink to excess.
In other examples, your kids leave toys on the front stoop of your rental home, and a visitor trips and is injured. Or your dog escapes the property and bites a jogger a block away.
In all of these cases, there might be medical costs that you’re expected to cover, and you may need to hire a lawyer to defend against the inevitable lawsuit. And if you lose the court case, you’ll probably have to pay a hefty fine and court costs. Not to mention what you’ll owe the plaintiff who successfully brought the lawsuit against you.
In these situations, your renters liability coverage will help pay claims when you’re liable for damages.
What Isn’t Covered by Renters Insurance Liability Coverage?
The key words here are accident and accidental. In the scenario in which a party guest gets belligerent and injures another guest, your renters liability insurance policy would probably offer coverage for medical and legal expenses brought on by the action. That’s because it’s assumed that you had no knowledge that the attack would occur.
But if you goaded the drunk guest to attack the other party, and he did, your tenant liability coverage would offer no benefits. Same situation if you were the one who injured the guest. Similarly, if a kitchen fire results in smoke damage to a neighboring unit, you’re probably covered. But if the fire was caused by you flicking a burning cigarette at a neighbor with whom you’re feuding, don’t expect to file a claim.
Accidents happen. That’s what your renters insurance liability coverage is for. Not for deliberate acts that cause bodily injury or property damage to others.
How Much Renters Insurance Coverage Do You Need?
Your standard renters insurance policy probably offers $100,000 in tenant liability coverage. Is that enough? It certainly seems like it would be in most cases, but there are situations in which it might be wise to ask your insurance agent about the cost of raising the limit.
For instance, if you have a high net worth, attorneys bringing suit against you might see a fat target on your back (or your wallet). They might figure they can sue you for more because you have more.
If you have an aggressive dog or other pet that could cause serious injury to a visitor or if it gets free, you’ll want to mention this to your insurance agent. Some breeds of dogs aren’t covered at all because of their reputation for aggressiveness, so this should be an important discussion.
The bottom line is that you should be transparent with your agent in explaining whatever vulnerabilities you might have and see if the liability limits in a standard renters insurance policy are sufficient.
Choosing Your Deductible Wisely
Your renters policy deductible is the financial amount you agree to take responsibility for before your insurer pays the rest of the claim. So if you have a $1,000 policy deductible, and you have $2,500 in liability costs, you’ll be responsible for the amount of your deductible, and your insurer will pay the $1,500 remaining.
The higher your deductible, the less your policy will cost. That’s because when you assume responsibility for a larger portion of the cost of a claim, the insurer will be able to pay a smaller amount. On the other hand, if you assume a very high deductible to keep your monthly premiums low, you’ll have to pay more out of pocket if you’re held liable for injuries or property damages.
It’s a balancing act. Ask your agent for advice, and run the cost numbers of a policy at various deductible levels until you find the sweet spot.