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Thanks for making it easy to find the cheapest renters insurance. Knowing our stuff is always protected gives me peace of mind.

Matt and Bethany, Charleston SC

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A rental insurance policy is a contract entered into between an insurance carrier and a person renting a home or a space within which to conduct a business. The person who rents the space whether it is a stand alone house or townhouse, an apartment or condo, or a loft, is now a leaseholder and essentially becomes a homeowner in the sense that he or she is now the person responsible for the ordinary maintenance of the space.

Rental insurance policy is also, sometimes, the term used to refer to the coverage that a property owner will purchase to safeguard rental property. The landlord retains responsibility for the extraordinary elements, some maintenance and upkeep, and the larger structural elements such as floors, roofs, walls, heating and cooling systems, plumbing, and electrical systems. For the most part, the rental insurance policy is the responsibility of the tenant.

The rental insurance policy is, therefore, very much the same as the homeowners insurance, with the exception being that any damage to those extraordinary structures and common elements mentioned above, are all covered under the property owner's policy.

ISO Forms

The Insurance Services Office (ISO) has standardized the homeowners policies to make coverage more uniform and to help both insurance carriers, renters, and homeowners be more secure. The rental dwelling insurance policies are referred to by a sort of code, and there are several of them, each carrying a different number. Forms exist for homeowners of all levels, for residences, rental property, and commercial property. Condominiums are treated specially.

Older homes also are provided a special form, the HO8, because they could be of high historic or architectural value and be quite priceless in those terms. Repairing homes like these would be very costly, if that were at all possible. They are worth significantly more in cultural terms than they could actually be estimated at market value.

There is the basic form homeowner policy, the HO1, which is in part the coverage provide in a rental insurance policy. It provides coverage against the eleven perils or risks listed within it, as mandated by the ISO. These perils include fire and lightning, vandalism or malicious mischief, explosion, riot or civil commotion, damage from smoke, vehicles, and aircraft, glass breakage, volcanic eruption, and theft. It always includes personal liability for bodily injury to anyone visiting or residing on. It usually includes personal belongings and what are called the contents of the house, but those have to be listed in an inventory and attached to the policy.

The rental agent or leaseholder could also apply either the clauses included in a broad form, or those of the more extensive protections in the special form, as the rental insurance policy he or she would prefer. These changes will be reflected in the policy premium. Both of these forms include the eleven of the standard form. The broad form lists seventeen perils or risks, and is now not a listed perils form, but a named perils policy. It will now include falling objects, the weight of ice, snow, or sleet that cause a roof to cave in, for example, damage from electrical surges, and three types of water damage such as ensue from plumbing, heating and cooling utilities or home appliances.

The typical special form policy that the tenant might select as the most appropriate rental insurance policy is the most comprehensive type, and is known as all risk coverage. The contents of the home are covered against loss or damage, and this variation of the forms is understood in such a way that every peril is covered, if it is not explicitly.

Natural disasters are not included in any of these policies. Natural disasters are the events that occur naturally, and that cause damage to structures and persons. Floods are covered by a federal program, the National Flood Insurance Program because of the special nature and frequency of catastrophic flooding episodes in some parts of the country. Earthquakes, hurricanes, and volcanic eruptions are other examples of natural disasters. If the renter needs any of these, they will have to be attached as riders to the rental insurance policy.

The ISO standards also include a specific rental policy form, called the HO4, or the tenant's form, which covers personal property and the contents of a home for the person renting it in the same way that forms HO2 and HO3 do. Homeowners will use the HO1, HO2, and HO3, and tenants will typically use the HO4, or either form HO2 or HO3. However, because it also excludes natural disasters, some tenants will attach specific riders that protect their possessions from natural disasters.

Insurance companies will adjust and modify the various forms to more closely fit the specific rental situations, so that any person entering into a rental contract, be it a student, senior citizen, or a young family, will be able to create the best rental insurance policy for the property.