I signed a new lease that requires me to get $1 million in general liability insurance. I've never needed this kind of coverage for a NYC apartment. Is this normal?
Many landlords, as well as owners of condos and co-ops who are subletting their apartments, require tenants to take out renters insurance policies, our experts say. And even when they don't, it's a good idea to do so.
"As a tenant, neither your property nor liability is covered under the owner's or landlord's insurance," says Jeffrey Schneider, president of Gotham Brokerage (a Brick sponsor). "And the owner or landlord does not want to submit a claim under his or her policy for damage they are not responsible for—if, for example, you let the tub overflow or fail to report a clogged AC drain that damages the apartment below."
Renters insurance policies typically cover losses or damage to tenants' personal property and protects them from liability claims. Landlords have their own policies that cover structural issues to their apartments, but it's always wise to purchase coverage to protect you from theft, fire, and water damage within your four walls. Liability coverage further protects you in case someone is injured while visiting your home.
Tenants often determine the amount of coverage to take out based on the value of their personal items, and the cost is not as high as you might imagine.
"Many insurers sell renters policies with $500,000 or $1,000,000 of personal liability coverage for less than $200 a year with minimum contents coverage," Schneider says. "For coverage above $1,000,000, you may need a second 'umbrella' policy. That can be double the price of the renters policy."
Your landlord's request is a bit on the higher side, so you may want to try negotiating with him or her on the size of the policy. But keep in mind that the unexpected happens, and it's better to have too much coverage than too little.
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