If you are a renter, purchasing a tenant’s liability policy can benefit you by protecting your apartment or house with insurance coverage.
What is a tenant’s policy? It is like having a homeowner’s policy for people who don’t own the apartment or house that they rent. The policy provides you with financial protection in the event that someone is hurt while on your rented premises.
How does it work?
Here is an example: suppose your children leave their skateboards by the front door. A visitor enters your apartment and accidentally steps on one of the skateboards, and falls, fracturing a hip. You could get sued. Without an insurance policy to protect you, once a lawsuit is filed, you will have to pay, out of your own pocket, for attorneys to defend you.
Without insurance protection, in the event that the lawsuit is successful, judgment may be entered against you and whatever assets or savings you have accumulated may be attacked. In addition, any judgment against you goes on record, and very often ends up on your credit history.
The alternative is to purchase insurance. A tenant’s policy provides for both the costs to defend a lawsuit, including attorneys’ fees, and protection up to the limit of liability coverage to pay for a judgment. For example, if you have a $250,000 policy, that amount would satisfy or be applied towards any judgment entered against you.
How much is enough coverage? Given the current cost of medical care, million dollar verdicts are much more commonplace. So you should make sure that you have adequate insurance protection, and discuss your individual situation with a licensed insurance broker.