Most folks know that Community Associations need to carry insurance. Many homeowners know that they also need insurance for their personal belongings and whatever portion of the unit the governing documents state they are responsible for insuring. But what about when a unit is a rental?

From the Association’s perspective, their insurance responsibility is the same regardless of who lives in the unit. However, if an owner chooses to rent out their unit, their homeowner’s policy would change because they may have less to insure within the unit (little, if any, personal property, for example).

Just like many owners think that “the association insures everything” (they do not), many renters think that “the landlord insures everything” (they do not). Think of it this way – whoever owns the stuff, needs to insure the stuff.
Owners who rent out their unit should require rental insurance from their tenants. Rental insurance covers the personal property of those living in the unit, as well as the renter’s personal liability, and can pay for increased living expenses if they are forced to move because of an insurance loss.

Take this example – because of a fire, a rented unit cannot be lived in for 8 weeks. The residents need to move to a hotel while repairs are being made. Will the association pay for it? No. Even if the association’s insurance is paying for the repairs, they will not pay for a hotel. Will the unit owner’s insurance pay for it? No. This is not a covered loss under the unit owner’s insurance policy unless the owner is living in the unit. Proper rental insurance will pay for the increase in living expenses if renters need to move out for repairs to be made.

Additionally, just like for Community Associations and Unit Owners, Earthquake Insurance is available as a separate policy for renters.

If you need additional information regarding insurance for renters, owners or associations, please give us a call!

Terri Guest, CIRMS, CMCA is the Northern California Sales & Marketing Representative for Berg Insurance Agency and can be reached at Terri@berginsurance.com.