I got a call from a member last week who wanted to know how an apartment renter can cover improvements and betterments he makes to his apartment. For example, if he's way more enthusiastic about decorating than I am, and decides to paint every room, how can he insure the value of the paint job? Commercial tenants can insure improvements and betterments, but what about apartment dwellers?
Turns out the coverage is baked right into the standard renters insurance policy. It's in a provision I never had a reason to pay attention to before, and thus didn't know it existed. The Additional Coverages section of the ISO Homeowners 4 - Contents Broad Form (HO 00 04 05 11) contains a coverage titled Building Additions And Alterations. It expands the coverage for personal property to include building improvements or installations, made or acquired at the named insured's expense, to the part of the residence used exclusively by the named insured. (The "used exclusively" phrase becomes important in multi-family homes or boarding situations. It's less important in apartment complexes.) The most the insurance company will pay for this is 10 percent of the limit for personal property.
Therefore, if a renter installs a surround sound system through the walls and cannot take the cabling with him when he moves, and he has $10,000 coverage for personal property, his policy will cover the installation for up to $1,000. ISO also has an endorsement available to increase the limit in increments of $1,000. The Homeowners manual does not provide a maximum limit, so the maximum will be whatever the insurer wants to offer.
I'm not sure how many people renting an apartment want to make permanent changes to it at their own expense, but if they do, they can get reimbursed should their work get damaged.
This fun fact has been brought to you by Tim's Toolbox of Indemnification Trivia. Feel free to use it as dinner table conversation, idle chat in the middle of a movie, or as a pickup line. You're welcome.
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