Do you want renters insurance? No, you need renters insurance.
If you’re a tenant, you better have renters insurance. But unfortunately, only about 37% of renters do.
Regardless of who you’re renting from or where you’re living, renters insurance is a necessary form of protection.
Renters insurance is the best way to keep you and your belongings safe. It protects you from things outside of your control and saves you from legal liabilities.
Once you realize all of the benefits of renters insurance, you’ll want to take advantage of its coverage.
What Does Renters Insurance Cover?
Renters insurance is a form of home insurance. It protects you and your belongings from hefty lawsuits and expensive replacement costs.
Renter insurance coverage typically includes:
- Personal property coverage
- Personal liability coverage
- Additional living expenses
With so many benefits, renters insurance must be expensive, right? Otherwise, everyone would have it.
Wrong. Renters insurance is extremely affordable. On average it costs renters $187 per year in America. As a renter, you should expect to pay between $15 to $50 a month for coverage.
Some landlords require tenants to have renters insurance. If this is the case for you, it should be written in your lease.
When it comes to insurance coverage, understand all of the facts. As a renter, it’s your responsibility to pick a plan that best protects you and your assets.
Why do you need renters insurance? The benefits speak for themselves.
Renters Insurance and Your Possessions
Renters insurance protects your personal property. If an event outside of your control damages your possessions, renters insurance covers replacement costs.
Your policy doesn’t only cover your belongings, but anything borrowed or rented in your home. If something is in your possession at the time of the incident, your policy should cover the cost to replace it.
Water Damage
Your landlord’s insurance won’t replace your personal belongings ruined by leaking water. But renters insurance will. Protect yourself and your belongings from severe water damage by having renters insurance.
Renter insurance coverage replaces personal items damaged from:
- Plumbing
- Radiators
- Air conditioners
If any of these cause damage to your belongings, renter’s insurance helps you replace them.
Keep in mind floods are not covered under water damage for renters.
Fire
Renter insurance coverage can’t protect your beloved belongings from going up in flames. But it can help you replace them.
If you come home to fire trucks outside your building, your policy should cover the costs of your lost possessions.
If you live in a large apartment complex, renters insurance protects you from your neighbor’s negligence. With an insurance policy, you’re covered if another tenant falls asleep with a lit candle or forgets to turn off their curling iron.
If you don’t have renters insurance, you are on your own.
Theft and Vandalism
Having personal property stolen is scary and stressful. Renters insurance can lower some of your anxiety.
Most renters insurance coverage replaces stolen possessions up to a specified value. The value is listed in your policy.
If you store expensive equipment in your apartment, you may require additional coverage. Consider purchasing an endorsement to protect high-quality or rare belongings.
Renters insurance also protects items outside of your home. Imagine you’re traveling and a thief steals your laptop from a hotel. Renters insurance can help you replace it.
Keep in mind this is considered “off-premise” coverage. Typical renters insurance policies limit this coverage. Most policies cover up to 10% of the replacement costs.
Renters Insurance and Liabilities
Renters insurance includes liability coverage. This pays for any injuries or property damage caused by negligence.
Dog Bites
If your dog bites someone on your property, you will be held accountable.
Fortunately, renters insurance offers protection. This is a very important benefit of renters insurance pet owners should consider.
Some plans limit coverage for dogs. If you have a dog, include it in your policy. Otherwise, you could face hefty medical expenses and legal fines.
Check your plan to ensure your specific breed is covered. Certain policies don’t cover “dangerous” dogs. Dangerous breeds include Pit Bulls, Great Danes, Rottweilers, and Chows.
If your dog isn’t covered in your plan, consider purchasing an umbrella policy.
Damages
Liability coverage protects you from expensive damages any guests or family members cause to others in your building. If you have small children or expect rowdy guests to hang out at your place, this is a major benefit of renters insurance.
If you have children, renters insurance covers injuries and property damage they cause your neighbors. If your child breaks your neighbor’s stereo, renters insurance foots the bill.
The same goes for guests. If you have negligent friends who cause damage to your neighbors or their property, your policy protects you from expenses and legal issues.
Renters insurance also handles injuries your guests incur at your home. If a visitor is injured on your property, renters insurance typically covers between $1,000 to $5,000 worth of medical expenses.
Legal Costs
Protect yourself and your assets in the event of a lawsuit with renters insurance.
If something tragic occurs in your home, renters insurance protects you during a lawsuit. If a neighbor tries to sue you, your liability coverage pays for legal costs and court awards.
There is a limit to what a policy will pay in legal fees. Limits start around $100,000. Your limit should be stated in your insurance plan.
When choosing a policy, you can choose how much you’d like covered. The higher the liability limit, the higher the premium you pay per month.
Renters Insurance and Living Expenses
Renters insurance keeps you from couch surfing if you can no longer live in your home.
If there is an accident that forces you to live elsewhere, renters insurance covers your expenses.
Perhaps a tree crashed through your walls or a fire forces you to live in a hotel. Your policy should take care of all expenses incurred during your displacement. Policies cover hotel fees, food, and any necessary travel.
If you have to rent another apartment, your policy should pay for that as well. Typically, the policyholder must cover upfront costs. The insurance company then reimburses you for all expenses.
That being said, keep receipts and document all expenses while you’re displaced from your home.
Limits of Renters Insurance
Most renters insurance does not cover damages from natural disasters. Events typically not covered include:
- Floods
- Earthquakes
- Tornadoes
- Tsunamis
- Mudslides
- Nuclear disasters
Know the area you’re living in. If any of these natural disasters pose a serious threat, inquire about including them in your plan. You should be able to get a more intense policy to protect yourself.
Renters insurance also does not affect your security deposit. If you damage your property as a tenant, your landlord reserves the right to repair the damage using your security deposit.
Pick the Right Coverage
Renters insurance is a renter’s most important form of protection. Like most policies, picking the right insurance coverage depends on your needs.
Before you select a plan, make a list of everything you need covered. Try to estimate the costs of all of your major belongings. Take your children, pets, and any other personal liabilities into consideration.
When selecting renters insurance, factor in your location and security.
If you live in a high crime area or your building has lax security, you’re more susceptible to a break-in or vandalism. That means you need a policy with sufficient theft coverage.
Check Different Rates
Once you know what kind of policy you need, shop around a bit. Check out different insurers. Talk to agents about your needs and learn more about how they assist renters.
If you can, use the same insurer as your car insurance. They often offer bundled discounts. You can save anywhere from 10% to 20% when you choose a bundle.
Choose a Plan for Your Needs
Make sure your plan covers everything you need it to.
Your liability limit needs to be high enough to protect your assets. Even if your dog has a wonderful temper, make sure it’s covered in the event of an attack. If you have children, pick renters insurance that pays for damages they may cause.
Once you’ve selected your plan, note everything that isn’t included. Consider other policies or endorsements to cover them.
Before you sign off on your plan, check its premium. This is the amount you’ll be expected to pay each month.
Factor the premium into your other expenses and make sure you can afford it. If it’s out of your budget, talk to your agent about making adjustments to your plan.
Figure out all of your expenses before you sign your lease. Use these handy rental calculators to determine your rental budget.
