What is Renters Insurance and Do I Need It If I’m Renting in Austin, Texas?
If you are renting a home or apartment in Texas, then there is a good chance your landlord might have already asked you to purchase a rental insurance policy. Even if they have not, purchasing a policy can still be a good idea.
After all—while a landlord may have insured their real estate, that policy is not likely to cover a tenant’s personal possessions. Renters insurance can pay to repair or replace clothes, furniture, and electronics, if they are stolen, lost, or damaged as the result of a covered event.
Renters Insurance May Not Cover All Your Property Damage
While renters insurance in Texas can provide peace of mind in many situations, it also has important limitations. These limitations can make it difficult to recover your expenses.
Here, we will provide a brief overview of what Texas renters insurance is, what it covers, and whether you might need to purchase a policy.
What Renters Insurance Is, And Why Austin Tenants Probably Want It
Landlord Insurance Only Protects the Landlord’s Property
Texas landlord-tenant law does not require every residential property owner or manager to purchase landlord insurance. But renting a residential property carries risks of damage or legal liability. That’s why many Austin landlords and property owners in Texas opt to cover their rental property with landlord insurance.
But landlord insurance is designed only to protect the rented property and its assets in the event of any unexpected loss—it does not extend to tenants’ personal possessions.
So if the rented property was burglarized, or damaged in a storm or fire, landlord insurance will not provide compensation to a renter. This is true, even if the renter did not do anything wrong.
The truth is, renters are on their own.
Renters Insurance Ensures That A Tenant’s Property Is Protected
Renters insurance is meant to cover the gap, offering protection for tenants.
In Texas, renters insurance policies generally include three different types of coverage:
Personal property coverage
This type of coverage will protect renters’ personal possession. The Texas Department of Insurance notes that most policies will even cover items which are stolen from a tenant’s car.
Loss of use
Similar to rental-car benefits on automobile policies, “loss of use” coverage will pay or reimburse money renters spend if they temporarily move out of their residence due to a short-term, covered incident.
Personal liability coverage
Critically, this coverage will protect tenants if someone is ever injured in their home—it will even help pay the costs of hiring an experienced Texas liability lawyer.
Slip-And Fall / Premises Liability For Renters in Texas
What if I’m renting and someone gets hurt on my property?
- If someone gets hurt on your property, even if you are a tenant, you may be legally responsible.
- It depends on whether the injury was a result of your being careless. The legal term for carelessness is negligence.
Let’s say you’ve just mopped the hardwood floors in your rented apartment when a social guest or utility worker arrives.
You should warn that person that the floors are wet when inviting them in.
Because under Texas law, if you don’t warn them of a dangerous condition like wet floors, you might be liable for their injuries if they slip and fall.
- That’s why many tenants in Austin choose to purchase personal liability renter’s insurance coverage.
- A renter’s personal liability policy will often pay for other peoples’ injuries on the property, even if the renter was somewhat negligent (careless).
- Not all renter’s insurance policies are the same. Speak to your insurance agent to find out what coverage is available.
Some Texas insurance companies offer tenants additional policies for:
Disaster coverage insurance will provide compensation for property damage caused by earthquakes, floods, or other region-specific hazards
Additional coverage for particularly valuable items
Sometimes renters insurance coverage limits may not meet the full value of a particularly expensive item, such as an artwork, jewelry or high-end computer system.
Extra liability coverage
In Texas, landlords may ask that tenants who are perceived as bringing additional risk to purchase extra liability coverage.
For example, if a tenant owns a certain breed of dog, or is renting a house with a swimming pool or gym, a landlord may require additional insurance to be purchased.
What Renters Insurance Usually Covers (and Doesn’t Cover) in Texas
The extent of renters insurance coverage will vary from one policy to another.
So if you’re considering which renters insurance policy to buy, it is always important to read the fine print. Some may have exclusions of certain property, or damages caused by unusual occurrences.
In Texas, renters insurance will typically shield individuals against:
- Fire damage
- Smoke damage
- Storm damage
- Injury liability
But every policy is different. It is important to speak to a renters insurance agent to find out exactly what is and what is not covered.
Don’t be afraid to ask questions, or make special requests. Policies can often be revised to cover a particular piece of property or risk you are concerned about.
In Texas, Renters Insurance Usually Won’t Cover Flood Damage
While renters insurance policies can protect against a great many risks, there is one notable exception: floods.
Base policies very rarely—if ever—cover flood-related losses and damages. This is because floods are common and have a great many different causes.
Many renters insurance companies do offer flood policies to tenants who want to protect their property against potential water damage. But in many states, as with Texas, flood insurance policies usually have to be purchased as an accessory.
Flood insurance may be recommended for people who live in flood-prone areas, including the coastal areas of Texas which are at risk for hurricanes.
How Renters Insurance Works
Covered Property Is Usually Compensated For the Value At The Time It Was Damaged
Actual Cash Value and Renters Insurance
If a loss is covered by renters insurance, the carrier will likely offer what is called “actual cash value” to cover the loss. Actual cash value refers to the value of the property at the time it was damaged.
In other words, the insurer will reimburse a tenant for the original value of the item minus depreciation.
For example, if a renter’s five-year old laptop is stolen, then the policy will provide funds to purchase what that five-year old laptop would cost today.
Depending on the model, this may result in a significant loss to the owner.
Replacement Coverage for Renters Insurance
Tenants who desire improved protection may purchase “replacement cost coverage.”
A Renters Insurance policy with replacement cost coverage will usually pay to replace damaged property. This is true, even if purchasing a replacement costs more than the property was actually worth at the time it was damaged.
For example, if a renter’s five-year old laptop is stolen, then the policy will provide funds to buy an equivalent laptop at today’s price, even if that price is more than what the tenant originally paid.
Deductibles Usually Apply to Rental Insurance Policies
Just like automobile insurance, Renters Insurance tends to carry deductibles for each type of coverage.
A deductible is the minimum that an insurance policyholder must pay before the insurance company has to pay. If the damage is less than the deductible, the policyholder will have to cover all the cost of the damage. For example, if a tenant’s policy covers theft with a $500 deductible, then the tenant will be responsible for paying $500 toward the value of the stolen item or items. If the damaged property is valued at $1000, the insurance company pays $500
$1000 Damage – $500 deductible = $500 insurance company payout
Getting the Most of Out of Renters Insurance
Renters should discuss their policy coverage options, along with the differences in price, before signing a contract. Be certain the policy covers all the property and risks you believe it will cover.
Inventory the covered property
Whatever coverage tenants purchase, in order to make a claim, a policyholder must usually demonstrate what property was damaged.
All of these steps can help substantiate loss in the event the tenant ever makes a policy claim:
So there are several good steps to take when purchasing renter’s insurance:
- Make a list of the items you own.
- List the estimated cost of each item and the approximate date of purchase.
- Include any receipts or credit card statements that can prove the cost of property.
- Photograph or create video recordings of all of the possessions. Be sure to photograph the property in the actual room of their home or apartment where the property is kept.
- If a piece of property is particularly valuable or unusual, be certain to record that. Also notify the insurance agent at the time of purchasing the policy.
Filing a Renters Insurance Claim in Texas
When filing a claim, renters should:
- Inform their company of loss as soon as possible.
- Send the company any information it requests as soon as possible.
- Keep any and all receipts which may substantiate claims of loss, damage, or repair.
Texas State Law and Renters Insurance
Texas law regulates renters insurance claims, and requires that companies:
- Notify the covered tenant that they have received the claim within 15 days.
- Accept or deny that claim no later than 15 days after which they have received all of the information necessary to process that claim.
- Either deny a claim or send a check within five business days of agreeing to make a payment.
Be Cautious About What You Say To The Insurance Company
Be careful when talking to the insurance company representative.
The insurance adjuster may be personally sympathetic with your situation. But insurance companies are businesses. Lower settlements mean higher profits.
The insurance company has the right to use any statements you make against you. Do not apologize or admit fault. Do not threaten or intimidate anyone. Instead, remain calm and level-headed.
The insurance company may deny coverage, or offer a settlement that will not pay for all your bills and injuries.
If the insurance company denies your claim, you may want to speak with an Austin personal injury attorney who can put together your case with a strong presentation of the evidence.
Getting More Help When More Help Is Needed
Insurance companies can sometimes be difficult to deal with: they may refuse to honor the terms of a policy, or contest facts which seem self-apparent.
If a tenant’s guest was injured in a swimming pool, for instance, and that guest later decides to file a personal injury lawsuit, then the insurance company may try to claim that it is not liable because the tenant did not properly maintain the pool, was intoxicated, or otherwise negligent.
While it is possible to challenge renters insurance decisions in Texas, the process can be time-consuming and challenging.
Talking To An Austin Personal Injury Attorney At Justinian & Associates Costs Nothing
Our dedicated roster of Austin personal injury lawyers are no strangers to battling insurance companies. And we offer an absolutely free consultation to hear the specific details of your case and let you know your options.
You Don’t Pay Unless We Win Your Case
We do not accept defeat.
That means unless we get you money for your injuries, you don’t pay us a dime.
We work on a contingency-fee basis, our pay is contingent upon whether we recover money for you or not. So if we work on your case and fail, you won’t owe a dime. We can talk by phone, video conference, or whatever you’re comfortable with. Just get in touch.
Your Rights Can Be Lost If You Wait
Statutes of limitation are laws that limit how much time you have to file a lawsuit after being injured. Texas statutes of limitation may apply to your property damage insurance claim if it has been denied. Don’t let your rights expire.
All We Do Is Fight For Injured Victims
Our only goal is justice for our clients, whatever that means for them.
We understand that the well-being and livelihood of you and your loved ones may be at stake.
Call, text or email us for a free consultation, with no obligation. Speak to an Austin personal injury attorney from Justinian & Associates (not a “screener” or paralegal) to understand your rights.