The 6 Best Reasons to Get Renter’s Insurance

Whether you live in an apartment, a house, or a duplex, you’ll need an insurance policy to cover your belongings. Your landlord’s property insurance policy will cover losses to the building as a whole. It is up to you, as a tenant, to find and pay for a renter’s insurance policy to cover your personal property and certain liabilities. Statistics show that far fewer renters have insurance than homeowners. 

People don’t think they’re covered by their landlord’s insurance, which is one reason why so few renters have insurance. Another reason is that people underestimate the value of their belongings. You would probably not need to spend a lot of money to get into the thousands of dollars if you added up your clothing and electronics.

It’s important to get renter’s insurance even if you don’t think you need it, because if someone is injured in your home, they could sue you.

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The most important takeaways

• Renter’s insurance covers your personal belongings when renting a home.
• You should know that landlords have property insurance, but those policies cover the building, not your belongings.
• Renters often don’t purchase renter’s insurance because they believe their landlord’s policy covers them or don’t think it’s necessary.
• Renter’s insurance may be required by your landlord
• Renter’s insurance is relatively inexpensive.

6 Best Reasons to Get Renter’s Insurance

1. It’s Relatively Affordable

According to the National Association of Insurance Commissioners (NAIC), renter’s insurance will cost $15 to $30 a month in 2020. The actual cost of your policy will depend on a number of factors, including how much coverage you need, which type of coverage you select, and how much your deductible is.

2. Personal property losses are covered

You can protect your clothing, jewelry, luggage, computers, furniture, and electronics with a renter’s insurance policy. Regardless of what you own, it can add up to a lot more than you think; and much more than you would want to pay to replace it all.

It is surprising how many perils are covered by renters’ policies. A standard HO-4 policy, for instance, covers losses to personal property from the following perils:

• Lightning or fire
• Hailstorm or windstorm
• The explosion
• Civil commotion or riot
• Aircraft
• Vehicles
• Smoke
• Vandalism
• Theft
• Volcanic eruption
• Falling object
• Ice, snow, or sleet weight
• Streams or overflows of water
• Breaking, cracking, burning, or bulging of certain household systems suddenly and accidentally
• Freezing
• Electrical currents generated artificially can cause sudden and accidental damage

There are no standard policies that cover floods and earthquakes. A separate policy or rider is required for these perils. Wind damage in hurricane-prone areas might also require a separate rider.

Prior to receiving coverage, your policy may require you to pay a deductible.

3. It may be required by your landlord

The landlord’s insurance covers the building and grounds, but not your belongings. Many landlords require tenants to buy their own renter’s insurance, which they’ll expect to see.

Your landlord may be able to help you find or secure coverage. This could be their idea or an “order” from their insurer. The idea is that the landlord might not have to take on as much responsibility if the tenants are covered.

4. Liability coverage is provided

A standard renter’s insurance policy also provides liability coverage. This protects you if someone is injured while at home or if you accidentally injure someone. It pays any court judgments and legal expenses.

The typical coverage limits for liability and medical payments are $100,000 and $50,000, respectively. Higher limits can be requested (and paid for) if needed.

You may not be covered by your renter’s insurance policy if you cause a fire by sleeping with a lit cigarette while you’re awake.

5. Your belongings are covered when you travel with it

Your personal belongings are covered by renter’s insurance, whether they are in your apartment, car, or on your travels. Whether you travel or not, your possessions are covered against theft and other covered losses. To find out what constitutes “other covered losses,” contact your insurance agent.

6. Additional living expenses may be covered

A landlord’s insurance policy may cover “additional living expenses” if a covered peril causes your home to become uninhabitable, such as relocation costs, food, etc. Check your policy for limitations on how much additional living expenses will be covered and for how long.

What is the value of renter’s insurance?

A renter’s insurance policy is a good idea if you can afford it. It will protect your belongings, provide liability coverage, and may cover your personal items when you travel.

Renter’s Insurance Covers 3 Things, What Are They?

Clothing, electronics (including computers and tablets), and furniture are usually covered by renter’s insurance.

What is the cost of renter’s insurance?

The National Association of Insurance Commissioners estimates that it could cost as little as $15 to $30 a month.

The Bottom Line

If someone is injured in your home, or if you accidentally cause injury to someone in your car, renter’s insurance covers your personal belongings.

Make sure you know what your insurance covers, including discounts, deductibles, and coverage limits. For example, you should know whether your policy provides replacement cost coverage for your personal property or actual cash value coverage.

You should choose renter’s insurance that best fits your needs when choosing a company. In the first case, you will be reimbursed for the cost of replacing a 15-year-old carpet at current market value, while in the second case, you will only be reimbursed for the value of a 15-year-old carpet. RCC is more expensive.